The rupee rose to a five-month high, helping it gain the most in 13 quarters, as global risk sentiment improved, and the government stuck to its original borrowing plan, showing further signs of fiscal discipline.
The government said after trading hours on Thursday it will stick to its scheduled Rs 2,00,000 crore borrowing plan for October-March and will not borrow more via bonds.
While the market was expecting the government to stick to its borrowing plan, a Reuters poll showed economists expecting Rs 50,000 crore of extra bond sales this financial year.
Global investors have been wary about the rupee, primarily due to the country's twin deficits -fiscal and current account, with ratings agencies threatening a downgrade to junk status.
Thus, the government's recent measures to keep the fiscal deficit to a minimum, by raising subsidised fuel prices and keeping spending in check has been received well by investors.
The rupee's gains were further aided by a strong global risk sentiment after Spain unveiled a crisis budget, which many saw as a precursor to the country seeking a bailout.
The partially convertible rupee rose to 52.49, a level not seen since May 1. It ended at 52.85, up from Thursday's close of 53.01.
In the process, the rupee has notched up a fourth successive week of gains and its best quarter since June 2009.
It is also the rupee's biggest monthly gain since January, rising 5.1 per cent, in a month where the government unveiled a raft of reforms including opening up multibrand retail and aviation to foreign investors.
No comments:
Post a Comment