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Rupee Stronger In Trade On Rajan's Comments

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The rupee and bonds opened stronger on Friday, 26 July following comments from Chief Economic Adviser Raghuram Rajan, but traders will now await the auction of Rs 15,000 crore worth of bonds for further direction.

Rajan said all options were being considered to fund the country's record-high current account deficit. He said policy measures were geared to stabilise a weak rupee in a way that only does "minimal damage" to growth. Rajan called for a clear distinction between the need to steady the rupee and the way forward for the Reserve Bank of India's monetary policy, in an interview to a business news channel. The RBI has taken slew of measures recently in its efforts to protect the rupee by making cash conditions tighter for lenders including by lifting short-term rates. The lead adviser to the finance ministry also said there was no intention to fix the rupee at a particular level. The Indian rupee had hit a record low of 61.21 to the dollar on 8 July.

Also Read: Bonds Gain Most In Three Years; Friday's Debt Sale Eyed

Traders said gains in the euro and other Asian currencies also helped the rupee with sentiment having changed after the recent central bank measures. At 9:06 a.m., the partially convertible rupee was trading at 58.85/86 per dollar compared to its Thursday's close of 59.11/12.

The benchmark 10-year bond yield was down 6 basis points at 8.13 per cent.

(Reuters)