After an extremely stable 2023, the Indian rupee started 2024 on a promising note and has turned out to be the best-performing Asian currency so far in January, appreciating 0.1 per cent despite 2 per cent rise in the dollar index.
All other Asian currencies depreciated by around 1.4-4 per cent during the month.
The local currency regained its ground against the greenback on the back of foreign portfolio inflows, said market participants.
As of January 18, foreign funds owned 21.2%, or ₹10,398 crore worth, of outstanding stock of a government bond maturing in 2028, Clearing Corporation of India data showed. The bond, which has an outstanding stock of ₹49,000 crore, is among the most liquid in the secondary market.
The Indian rupee this week
will likely look to build on its nascent momentum, counting on
more debt and speculative flows and the dollar s soft outlook,
while government bond yields may consolidate.
The Indian rupee and bond
yields this week will be looking at the U.S. inflation data for
cues on when the Federal Reserve is likely to reduce borrowing
costs, as well as India s inflation data. .
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