The rupee closed at 83.495/$1, up from 83.50/$1 earlier, Bloomberg data showed.
Foreign investors have invested Rs. 2,575 crore worth of Indian equities and Rs. 1,180 crore in fully accessible Indian government bonds, BSE and CCIL data show.
Brent crude oil traded at $86.86 a barrel, Reuters data showed. “Crude oil is a cause for concern as it is moving closer to $87. The pressure is coming from oil marketing companies who are buying crude on the expectation that it could rise further”, said Ritesh Bhansali, Vice President, Maclai Financial Services.
A rise in crude oil prices poses upside risks to India’s trade deficit and inflation as the country is a major importer of the commodity.
The benchmark 10-year government bond yield closed at 6.99% on Thursday, unchanged from the previous close, CCIL data showed.
Some bond traders are hopeful that the Center will likely announce a reduction in its total debt in the full budget for 2024-25, which will be detailed later this month. In the interim budget detailed in February, the Center reduced its total borrowing for FY25 to Rs. 14.13 lakh crore was fixed.
A large surplus dividend transfer from the RBI to the government this year is expected to accelerate the Centre’s fiscal consolidation and hence reduce its debt.
RBI data shows that on July 3, the central bank withdrew from banks Rs. 1.25 lakh crore has been exploited. Absorption of funds by RBI indicates excess liquidity with banks.
“Things should be good from a liquidity perspective this month and the first half of August as government bonds are maturing at the end of July,” said a trader.
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