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Rupee, bonds gain on fiscal discipline peg

THE ASIAN AGE. | FALAKNAAZ SYED
Published : Jul 5, 2019, 2:00 am IST
Updated : Jul 5, 2019, 2:00 am IST

At the interbank forex market, the rupee opened at 68.86/$ and advanced to a high of 68.49 during the day.

The dollar index, which gauges the greenback's strength against a basket of six major currencies, slipped 0.03 per cent to 96.73.
 The dollar index, which gauges the greenback's strength against a basket of six major currencies, slipped 0.03 per cent to 96.73.

Mumbai: The rupee and bonds ended with gains as the Economic Survey 2018-19 released on Thursday signalled the government's intention to maintain the fiscal deficit in the Union Budget slated to be released the next day. Moreover, news during the day that the National Company Law Appellate Tribunal (NCLAT) has approved Lakshmi Mittal-led Arcelor Mittal's plan for Essar Steel also helped the rupee to strengthen.

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 40 paise against its previous close of 68.89. The dollar index, which gauges the greenback's strength against a basket of six major currencies, slipped 0.03 per cent to 96.73.

The 10-year government bond yield fell 8 paise to close at 6.75 per cent amid lower crude oil prices. Yields and prices move in opposite direction. Brent crude futures, the global oil benchmark, slipped 0.13 per cent to $63.74 per barrel.

Madhavi Arora, Lead Economist Edelweiss Sec-urities, Forex and Rates, said, "Bond yields fell and the rupee appreciated as the Economic Survey released on Thursday signalled that the government could stick to the fiscal deficit target of 3.4 per cent in the Budget that will be announced on Friday."

"Secondly, news that the NCLAT has approved the Arcelor Mittal bid for Essar Steel also helped the rupee to appreciate as it hinted at deal-led foreign flows in the economy," added Arora.

Tags: union budget