Mumbai: The Indian rupee on Monday strengthened against US dollar tracking gains in the local equity markets.
At 2.30pm, the home currency was trading at 63.76 a dollar, up 0.13% from its Friday’s close of 63.85. The rupee opened at 63.89 a dollar, and touched a high and a low off 63.75 and 63.99, respectively.
Local markets have surged 4.3% so far this year after the government moved to contained its fiscal deficit target. On Saturday, Oil and Natural Gas Corp. Ltd announced that it will buy 51% government’s stake in Hindustan Petroleum Corp. Ltd for around Rs36,000 crore.
The proceeds of the sale will be used by the government to narrow fiscal deficit of 3.2% for this fiscal year. Last week, the government lowered its borrowing programme to Rs20,000 crore from Rs50,000 crore extra announced less than a month ago.
The benchmark Sensex rose 0.57%, or 200.82 points, to 35,712.40.
The 10-year bond yield was at 7.279% compared to its previous close of 7.295%. Bond yields and prices move in opposite directions.
Traders are cautious ahead of the last full-year Union budget on 1 February before the 2019 elections and Reserve Bank of India’s bi-monthly policy on 7 February.
So far this year, the rupee has risen marginally 0.04%, while foreign investors bought $822.50 million and $471.90 million in equities and bonds, respectively.
Asian currencies were trading lower after US lawmakers failed to avert a government shutdown, while an unexpected drop in a consumer sentiment index Friday signalled more weak economic data in January, Bloomberg reported.
South Korean won was down 0.24%, Philippines peso 0.21%, Indonesian rupiah 0.14%, Malaysian ringgit 0.07%, China offshore 0.06%, Thai baht 0.06% and Hong Kong dollar fell 0.04%. However, Taiwan dollar was up 0.57%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 90.591, up 0.02% from its previous close of 90.572.