Rupee gains 39 paise to 68.50 ahead of Budget; lower oil prices, stronger domestic equity markets support domestic currency

Mumbai: The Indian rupee on Thursday furthered its gains by another 39 paise to 68.50 a US dollar, tracking firmer emerging market currencies, lower crude oil prices, even as participants keenly awaited the Union Budget to be unveiled on Friday. At the interbank foreign exchange market, the rupee opened at 68.86 per dollar and advanced to a high of 68.49 during the day. It finally settled at 68.50, up 39 paise against its previous close of 68.89. Meanwhile, the Economic Survey 2019 stressed the need to give a huge boost to spending and reforms to accelerate higher rate of expansion to double the economy’s size to $5 trillion by 2024-25. [caption id=“attachment_5114261” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] Forex traders said the Budget will give further cues going ahead in the currency market. “Rupee gain was followed by stronger emerging market currencies. Lower crude oil prices and stronger domestic equity markets supported rupee in Thursday’s trade,” said V K Sharma, head PCG and capital markets strategy, HDFC Securities. Meanwhile, the 10-year government bond yield was at 6.75 percent on Thursday. “India’s 10-year sovereign bonds are trading higher as a key government report said the federal and state administrations are generally on the path of fiscal consolidation,” Sharma said. Brent crude futures, the global oil benchmark, slipped 0.13 percent to $63.74 per barrel. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 28.95 crore on Thursday, as per provisional data. The dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.03 percent to 96.73. In the stock market, the 30-share BSE Sensex settled 68.81 points, or 0.17 percent, higher at 39,908.06; while the broader NSE Nifty climbed 30 points, or 0.25 percent, to 11,946.75. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 68.8776 and for rupee/euro at 77.7256. The reference rate for rupee/British pound was fixed at 86.6076 and for rupee/100 Japanese yen at 64.00.