BackMarkets, rupee, bonds trades flat ahead of key interim budget
At 9.15am, the rupee was trading at 71.13 a dollar, down 0.06% from its previous close of 71.09.Benchmark Sensex rose 0.17% to 36316.65 points. So far this year, its up 0.52%
PremiumIndian markets, rupee and bonds were trading flat ahead of key interim budget, a last ditch attempt to win voters trust by prime minister Narendra Modi with possible populist spending measures before general elections due by May. Interim finance minister Piyush Goyal will start reading budget by 11AM.
At 9.15am, the rupee was trading at 71.13 a dollar, down 0.06% from its previous close of 71.09. The home currency opened at 71.07 a dollar.
The 10-year bond yield was trading at 7.279% from its Thursday's close of 7.283%. Bond yields and prices move in opposite directions.
Benchmark Sensex rose 0.17% to 36316.65 points. So far this year, its up 0.52%.
The government is set to widen its deficit target for fiscal year 2019 to 3.5% of gross domestic product from 3.3% and for FY20 to 3.3% from 3.1%, Bloomberg survey shows.
Gross borrowing may rise to ₹6.40 trillion in FY20, versus revised ₹5.35 trillion in FY19, according to another Bloomberg survey. Net borrowing, adjusted for repayment of bonds, is seen at ₹4.20 trillion versus ₹3.91 trillion this fiscal year.
"Budget could give some indication of the government's commitment to fiscal consolidation, which is one of the main sensitivities in the sovereign rating, says Fitch Ratings. Higher pre-election spending could risk a second consecutive year of fiscal slippage relative to the government's targets and would further delay plans to reduce the high general government fiscal deficit and debt burden", Fitch Rating said in a 31 January note
So far this year, the rupee has declined 1.87%, while foreign investors have sold $463.30 million and $353.50 million in the equity and debt markets respectively.
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