The Indian rupee has erased some of its intraday gains but trading higher by 30 paise at 71.02 per dollar. However, it rose to 70.67 after Finance Minister Nirmala Sitharaman announced several measures to promote investment and growth.
The benchmark indices, Sensex and Nifty, posted biggest single session gains in the last 10 years.
The domestic currency opened higher by 12 paise at 71.20 per dollar versus Thursday’s close 71.32.
The lowering corporate tax gave rupee a big boost and USD/INR spot dropped to 70.67. The move was imperative as we are in a low demand cycle amid global idiosyncrasies. RBI has been providing support to the economy by reducing interest rates since 2019 however economy needed some boost from the fiscal front as well, said Rahul Gupta, Currency Research Head, Emkay Global Financial Services.
Meanwhile, the bond market did not take the fiscal announcement very well. Also, FM was unable to justify the fiscal concerns, thus the 10-year yield surged nearly 25 bps keeping rupee gains under check. Thus, unless USD/INR spot doesn’t end below 70.80, we expect prices to bounce 71.50 in next week, he added.
The rupee close at 71.32 against the US dollar on September 19 as heavy selling in domestic equities, unabated foreign fund outflows and rising crude oil prices kept investors edgy, said PTI.
The dollar-rupee September contract on the NSE was at 71.38 in the previous session. Open interest declined 7.12% in the previous session, said ICICIdirect.
We expect the USD-INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions, it added.
News Source: Moneycontrol