Mumbai: The Indian rupee on Tuesday closed stronger for the fifth consecutive session against the US dollar, ahead of Union Budget. The currency closed at a five week high.

The home currency closed at 67.87 a dollar — up 0.14% from Monday’s close of 67.95. The rupee opened at 67.81 a dollar and touched a high and a low of 67.79 and 67.89, respectively. So far this year, it has gained 0.15%.

The Economic Survey 2016-17 presented in Parliament projected the economy to grow in the range of 6.75% to 7.25% in the next fiscal year 2017-18 post demonetisation.

“Overall, we judge that the survey is realistic in its growth assessment and, while it highlights the risks to the fiscal deficit in FY18, it also suggests the need to balance short-term growth imperatives with medium-term fiscal prudence. What it means in actual numbers is hard to predict, but the path to fiscal consolidation should continue", Nomura research report said.

In the budget, Nomura expect that the government to continue down the fiscal consolidation path and target a fiscal deficit of 3% in FY18 (Cons: 3.3%) versus 3.5% in FY17. The brokerage also expect a rationalisation and simplification of direct taxes and the budget to focus on the themes of a “less-cash" economy, rural development, affordable housing and infrastructure.

India’s benchmark Sensex index closed at 27,655.96 points, down 0.7% or 193.60 from its previous close. So far this year, it has gained 4.3%.

The 10-year bond yield closed at 6.407% compared to Monday’s close of 6.406%. Bond yields and prices move in opposite directions.

So far this year, foreign institutional investors have sold $72.90 million and $409.50 million in equity and debt, respectively.

Asian currencies were trading higher. South Korean won was up 1.3%, Taiwan dollar 0.46%, Singapore dollar 0.16%, China offshore 0.12%, Malaysian ringgit 0.05%. However, Indonesian rupiah was down 0.15%, Japanese yen 0.11%, Philippines peso 0.05%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.45, up 0.01% from its previous close of 100.43.

Traders are cautious ahead of the US Federal Reserve which will start its two-day policy meeting, on Tuesday and Wednesday. The Bank of England meets Thursday, and although analysts expect the policy mix to be unchanged, markets’ reaction to any guidance will shed light on investor positioning on the pound.

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