India’s Rupee has now fallen for three consecutive weeks versus the greenback. At the interbank market, during the previous week, the value of Rupee depreciated by 38 paise settling down -0.53% at 71.62 against the US dollar. However, the USD/INR exchange rate was seen trading within a trading range of 71.09 and 71.74.
USD/INR – India GDP forecast lower than previous projection
India’s finance minister Nirmala Sitharaman addressing the parliament, said that the fiscal deficit for the current fiscal year will be 3.8% of the GDP compared to 3.3% the initial government’s target. The Union Budget 2020 also revealed that the government forecast the GDP growth for 2021 at 6.0% to 6.5%. The current projection is lower than an earlier forecast of 7.0%.
The budget also includes a series of new measures to uplift the lackluster economic growth. The new personal income tax regime coupled with abolishing dividend distribution tax wasn’t enough measures to boost investor confidence. PM Modi’s vision of a $5 trillion economy looks now in jeopardy.
The dollar index, which gauges the greenback’s strength against a basket of major currencies, settled down -0.53% at 97.36, reaching a two-week low.
Elsewhere, foreign institutional investors (FIIS) were net sellers of shares in the local equity market worth Rs -1199.53 crore; according to the National Stock Exchange of India data published at the end of Thursday’s trading session. On the other hand, Domestic Institutional Investors (DIIs) were net buyers of equities worth Rs 36.64 crore.
The domestic benchmark equity index NIFTY 50 was open for trading on the Union Budget day and crashed after revelation that India will miss its fiscal deficit target for 2019 – 2020. Nifty 50 closed down -2.51% at 11,661.85. However, during early Asia trading hours on Monday, Indian shares continued to remain grounded as NIFTY50 was seen quoted at 11,680.55.
The Indian 10-year government bond yield was seen quoted at 6.52% in morning trade compared with its previous close of 6.60%.
Currently, at the interbank market, one US dollar buys 71.57 Rupees, down -0.07% as of 8:00 AM UTC.