Rupee closes marginally stronger against US dollar ahead of Lok Sabha results

  • On Sunday, exit polls forecast that the Narendra Modi-led government will return to power for a second term
  • The rupee closed at 69.67 a dollar, up 0.06% from its previous close of 69.72. The Indian currency opened at 69.68 a dollar

Mumbai: The Indian rupee on Wednesday closed marginally stronger against the US dollar ahead of the 2019 general election final result due on 23 May.

On Sunday, exit polls forecast that the Narendra Modi-led government will return to power for a second term, with Bharatiya Janata Party (BJP) and allies likely to secure over 300 seats in India’s 543-seat lower house.

The rupee closed at 69.67 a dollar, up 0.06% from its previous close of 69.72. The Indian currency opened at 69.68 a dollar.

Analyst expects rupee may fall if crude oil prices trade higher from current levels.

Traders also exercised caution ahead of the release of minutes of the latest US Federal Reserve policy meeting and a speech by European Central Bank President Mario Draghi. A steadily deteriorating US-China trade relationship weighed on sentiment.

India’s benchmark Sensex index was up 0.36% at 39,110.21 points. Year to date, the index has risen 8%.

The 10-year bond yield closed at 7.26% compared with Tuesday's close of 7.304%.

So far this year, the rupee has risen 0.13% against the US greenback. During the period, foreign investors bought $9.29 billion in Indian equities and sold $476 million in debt market.

Other Asian currencies traded lower. The Malaysian ringgit and the Indonesian rupiah were each down 0.23%, the Taiwan dollar eased 0.17%, China renminbi was 0.14% lower, the Japanese yen fell 0.1%. However, the Philippines peso was up 0.1%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.023, down 0.04% from its previous close of 98.062.

(Bloomberg contributed this story)

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