The Indian rupee weakened for the third day in a row against the U.S. dollar. The home currency depreciated 0.44 percent intraday to 72.18 against the greenback.
The local legal tender could trade lower as the new central bank chief and Prime Minister Narendra Modi’s party suffered a setback in a key state election. Shaktikanta Das, who oversaw Prime Minister Narendra Modi’s controversial cash ban program, was appointed new RBI governor for a three-year term, a day after Urjit Patel abruptly quit following disagreements with the government.
In the bond markets, the benchmark 10-year bond dropped six basis points to end at 7.53 percent on Tuesday.
Nomura is constructive on Indian bonds due to favorable supply dynamics and expectations that lower inflation will fuel a dovish RBI stance. Inflation data is due out later in the day.
