Rupee opens higher against US dollar

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Mumbai: The Indian rupee opened higher against US dollar on Wednesday as foreign institutional investors (FIIs) continued to buy in local equity and debt market.

So far this year, FIIs have bought a combined $2 billion in equity and debt. A bulk of this, nearly $1.23 billion, has come to equity markets and the remaining $714 million to debt markets.

The rupee opened at 63.75 a dollar. At 9.15am, the home currency was trading at 63.66 a dollar, up 0.19% from its Tuesday’s close of 63.78. So far this year, the rupee has risen marginally 0.24%.

Bond yield fell for the third session after the government said it will sell less debt on Thursday’s auction than earlier planned. The government will offer Rs11,000 crore of notes compared to Rs15,000 crore planned, Bloombergreported.

The 10-year bond yield was at 7.241% compared to its previous close of 7.253%. Bond yields and prices move in opposite directions.

The benchmark Sensex rose 0.06%, or 21.64 points, to 36,161.62. So far this year, it has gained 5.5%.

Traders are cautious ahead of the last full-year Union budget on 1 February before the 2019 elections and Reserve Bank of India’s bi-monthly policy on 7 February.

On Thursday, Prime Minister Narendra Modi at the opening session of the World Economic Forum in Davos said that India is an investment destination and his government is following the principle of reform, perform and transform. The prime minister said that 1.25 billion Indians were ready to accept changes and challenges for creating a $5 trillion economy by 2020.

Asian currencies were trading higher. Thai baht was up 0.28%, Japanese yen 0.24%, Malaysian ringgit 0.22%, Philippines peso 0.18%, China renminbi 0.19%, Singapore dollar 0.08% and Indonesian rupiah rose 0.08%. However, Taiwan dollar was down 0.13%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 89.964, down 0.18% from its previous close of 90.124.livemint