BackRupee rose about 16 paise to close at 82.93 against the US dollar
The US dollar index reached 105.74 on Thursday, the highest in over six months, while the US 10-year Treasury yield climbed to 4.50%, the highest since 2007, on expectations that the US Federal Reserve will hold rates higher for longer.
PremiumThe Indian rupee appreciated to end 16 paise higher against the US dollar on Friday. The local currency ended at 82.93 as compared to previous close of 83.09.
The Indian rupee opened 27 paise higher against the US dollar on Friday after JPMorgan’s announcement to include India in emerging market bond index, which is expected to lead to billions of dollars worth inflows. The local currency opened at 82.82 a dollar as compared to previous close of 83.09.
The 7.18% 2033 Government Bond yield opened at 7.08% versus Thursday's close of 7.14%.
The US dollar index reached 105.74 on Thursday, the highest in over six months, while the US 10-year Treasury yield climbed to 4.50%, the highest since 2007, on expectations that the US Federal Reserve will hold rates higher for longer.
On Thursday, the rupee depreciated marginally to end 2 paise lower at 83.09.
Indian government bonds will be included in the Government Bond Index-Emerging Markets index and the index suite, JPMorgan said on Friday.
The inclusion will start on June 28, 2024, and extend over 10 months with 1% increments on its index weighting. India is expected to reach the maximum weighting of 10%, JPMorgan added.
Read here: JPMorgan to include India in its emerging market debt index, paving the way for billions in inflows
The index inclusion could result in inflows of about $24 billion into eligible government bonds from the start of next year to May 2025, IDFC First Bank said in a note, Reuters reported.
Crude oil prices traded higher, limiting upside for the rupee.
On supply concerns, Brent crude oil futures increased about 0.9% to $94.12 and are up 8% for the month.
In Asia trade, the 10-year U.S. yield increased to a 16-year high of 4.50%.
The benchmark Indian equity indices, the Sensex and Nifty 50, closed in the red for the fourth straight trading session amid weak global cues as US Treasury yields increased to their multi-year high levels and crude oil prices increased by about 1%, dampening investor appetite for riskier equities.
Sensex concluded the day at 66,009.15, down 221 points, or 0.33 percent, while the Nifty 50 closed at 19,674.25 with a loss of 68 points, or 0.34 percent.
Investors will be keeping an eye on the U.S. core personal consumption expenditure inflation for August and second-quarter GDP statistics next week.
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