BackRupee weakens marginally ahead of key budget
Other Asian currencies were trading weaker on FridayThe 10-year bond yield was at 6.753%
PremiumMumbai: The Indian rupee weakened marginally against the US dollar ahead of key Union Budget which will be presented by Finance minister Nirmala Sitharaman due later on Friday.
At 9.15 am, the rupee traded at 68.57 a dollar, down 0.10% from its previous close of 68.51. The Indian currency had opened at 68.58 a dollar.
The 10-year bond yield was at 6.753%, compared with Thursday's close of 6.748%. Bond yield and prices moves in opposite directions.
Finance minister Nirmala Sitharaman will present her maiden budget on Friday at a crucial juncture in the economy when growth is slowing down and so are revenue collections. Consumer demand which has so far been the only engine driving the economy now looks vulnerable
Traders keenly awaiting fiscal deficit and borrowing target with confirmation that the government intends to keep to its targets in the budget. According to a Bloomberg survey government will widen the budget deficit target to 3.5% of GDP at upcoming budget, up from a February estimate of 3.4%.
Earlier on Thursday, chief economic adviser said the government will keep its fiscal deficit under control as it sees a rebound in economic growth from a five-year low. The Finance Ministry said growth will probably reach 7% in the current fiscal year that began on April 1. The government will seek to avoid undermining private investment by widening the fiscal deficit, Krishnamurthy Subramanian, author of the Economic Survey report and chief economic adviser, told reporters Thursday
The benchmark equity index Sensex was up 0.12% at 39,888.13 points. Year to date, the index has risen 10.65%.
So far this year, the rupee has risen 1.8% against the greenback. During the period, foreign investors bought $10.80 billion in Indian equities and $1.58 billion in the debt market.
Other Asian currencies were trading weaker as traders awaiting US non farm payrolls and wage growth data due later on Friday as well as Federal Reserve Chairman Jerome Powell’s semiannual testimony next week for more clues on the policy outlook.
(Bloomberg contributed to this story)
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