 "Rupee, rupee vs dollar")
The Indian rupee and bond prices fell on Tuesday as crude prices shot up to a seven-year high, pulling down stocks globally and firming up the dollar index.
The rupee closed at 74.44 a dollar after staging a comeback from its intraday low of 74.6325 a dollar. However, it was down from its previous close of 74.31. The dollar index, which measures the greenback’s strength against major global currencies, crossed 94 — its highest level since November 2020.
Despite that, a strong performance by the local stock index helped stem the rupee loss. Dealers say domestic investors filled in the space left by foreign investors. The BSE Sensex closed up by 445 points, or 0.75 per cent, at 59,744.88 points even as Nasdaq had fallen over 2 per cent overnight.
The 10-year bond yield closed at 6.261 per cent, up from its previous close of 6.248 per cent. In the intraday trade, the bond yields had crossed 6.27 per cent, fearing widening fiscal deficit and rising inflation as the crude prices firmed up.
The outlook upgrade action by Moody’s, however, will make life easier for policy makers, and bond yields are expected to fall ahead of the three-day monetary policy committee (MPC) meeting, starting Wednesday.
The six-member committee, headed by Reserve Bank of India Governor Shaktikanta Das, has kept rates low even before the pandemic started, but rising yields make its objective of supporting growth difficult. However, the central bank also gave a signal about its comfort with higher rates by allowing the cut-off at the seven-day reverse repo at 3.99 per cent, the same as the repo rate.
The rupee closed at 74.44 a dollar after staging a comeback from its intraday low of 74.6325 a dollar. However, it was down from its previous close of 74.31. The dollar index, which measures the greenback’s strength against major global currencies, crossed 94 — its highest level since November 2020.
Despite that, a strong performance by the local stock index helped stem the rupee loss. Dealers say domestic investors filled in the space left by foreign investors. The BSE Sensex closed up by 445 points, or 0.75 per cent, at 59,744.88 points even as Nasdaq had fallen over 2 per cent overnight.
The 10-year bond yield closed at 6.261 per cent, up from its previous close of 6.248 per cent. In the intraday trade, the bond yields had crossed 6.27 per cent, fearing widening fiscal deficit and rising inflation as the crude prices firmed up.
The outlook upgrade action by Moody’s, however, will make life easier for policy makers, and bond yields are expected to fall ahead of the three-day monetary policy committee (MPC) meeting, starting Wednesday.
The six-member committee, headed by Reserve Bank of India Governor Shaktikanta Das, has kept rates low even before the pandemic started, but rising yields make its objective of supporting growth difficult. However, the central bank also gave a signal about its comfort with higher rates by allowing the cut-off at the seven-day reverse repo at 3.99 per cent, the same as the repo rate.
