The Indian rupee hit a two-month high against the US dollar, while 10-year bond yield hit a seven-year low on Wednesday, as foreign institutional investors (FIIs) kept on buying in local equity and debt markets. The Rupee opened at 66.68 and closed at 66.67, a level last seen on 9 June. At 9.15am, the base currency was trading at 66.68 a dollar, up 0.24% from its previous close of 66.84.
So far this year, the rupee is down 0.8%, while FIIs have bought $5.21 billion in equity and sold $964.30 million in debt markets.
India’s benchmark Sensex index rose 0.29% or 81.62 points to 28,166.78. So far this year, it has gained 7.5%. The RBI left its significant policy rate untouched on Tuesday taking acknowledgment of the recent rise in inflation which places the consumer price index unpleasantly close to the upper tolerance limit of 6% as authorized by the government. The cash reserve ratio (CRR) did not change at 4%.
On Tuesday, Rajan said that the Reserve Bank of India (RBI) has been front-loading liquidity provision through its open market processes and spot interventions or deliveries of forward purchases, as a consequence of the anticipated burden in FCNR (B) redemptions estimated in September. He included that the RBI will continue to work to make sure that there are no market disturbances because of the redemptions through national liquidity operations and Forex interventions.
The dollar index, which measures the US currency’s power against major currencies, was trading at 95.768, 0.43% less from its previous close of 96.183.
Rupee soars to the 2-month high with 66.67 Against Dollar
