BackRupee closes stronger against US dollar on hopes of govt meeting fiscal deficit target
The rupee closed at 67.96 per dollar, up 0.12% from its previous close of 68.05.
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Mumbai: The Indian rupee on Thursday strengthened for the second session against the US dollar on the expectation that the government may achieve its fiscal deficit target after finance minister Arun Jaitley said the tax collection will exceed budget estimates.
The rupee closed at 67.96 per dollar, up 0.12% from its previous close of 68.05. The home currency opened at 67.91 against the dollar and touched a high of 67.75. Since 1 April 2016 till date, the rupee has fallen 2.4%.
The Central government will exceed its budget estimates for both direct and indirect tax collections this year, Jaitley said on Wednesday. The increase in tax revenue is expected to counter the shortfall in divestment receipts and help the government achieve its fiscal deficit target of 3.5% of gross domestic product in 2016-17, Mint reported.
India’s benchmark Sensex index closed at 26,878.24 points, up 0.92% or 245.11 points from its previous close. Since 1 April till date, Sensex has gained 6.1%.
Traders are cautious ahead of the US employment figures on Friday.
The 10-year bond yield closed at 6.387%, compared to Wednesday’s close of 6.382%. Bond yields and prices move in opposite directions.
So far this fiscal year, foreign institutional investors bought $1.46 billion in equity, while they sold $5.69 billion in debt.
Asian currencies were trading higher after the US Federal Reserve minutes showed the central bank is concerned about a strengthening dollar, and that more fiscal stimulus could raise demand above sustainable levels, according to a Reuters report.
South Korean won was up 1.7%, Taiwan dollar 1.08%, China renminbi 0.64%, Indonesian rupiah 0.55%, Japanese yen 0.51%, Philippines peso 0.37%, China Offshore 0.32%, Malaysian ringgit 0.26%, Singapore dollar 0.22%. However Thai Baht was down 0.07%
The dollar index, which measures the US currency’s strength against major currencies, was trading at 102.44, down 0.25% from its previous close of 102.70.
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