Markets

Rupee, bonds gain on global oil price decline

Photo used for representational purpose only.   | Photo Credit: Reuters

The rupee and bonds strengthened on Thursday as a drop in global crude oil prices helped calm investor worries over sustained imported inflationary pressures in the economy.

India imports about 80% of its oil requirements and high global prices percolate through the economy and hurt consumers, while also widening the country’s current account deficit.

Oil prices dropped to their lowest in two weeks after data showed a jump in U.S. inventories, and rising cases of COVID-19 in Europe, Russia and outbreaks in China dented hopes for an economic recovery.

The rupee was trading at 74.84/85 per dollar at 0748 GMT compared to its close of 75.025 on Wednesday.

Yields dip

Traders said bond yields too dropped, tracking the fall in U.S. Treasury yields and oil prices with the 10-year expected to be rangebound between 6.25% and 6.40% in the absence of major triggers.

The 10-year bond yield was trading at 6.33%, down 1 basis point on the day after having touched 6.31% earlier in the session. The central bank on Wednesday announced a 28-day variable rate reverse repo auction for ₹50,000 crore on November 2, a move some said is another step towards liquidity normalisation.


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Printable version | Nov 29, 2021 5:10:49 AM | https://www.thehindu.com/business/markets/rupee-gains-11-paise-to-end-at-7492-against-us-dollar/article37210263.ece

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