Comments
The rupee was trading strong at 58.96 to the dollar at about 1.50 p.m. after opening at 59 to the dollar.
The stock markets are delirious with the index shooting through by 6 per cent in just a little under an hour’s trade as the election results come in.
Early leads indicate a rousing victory for BJP. No results have been declared yet. Only lead positions are available.
In a couple of states, the first few counting rounds are still in progress. Clear indications are expected in about an hour or two from now.
The rupee zoomed to a 11-month high of 58.80 per dollar in the opening trade against the previous close of 59.08 as the election trends indicate that the Bharatiya Janata Party seems set to sweep the general elections to the Lok Sabha 2014.
The rupee shed some of its gains as, according to traders, the RBI was an active buyer in the currency market.
The saffron party is seen as more pro-investment than the incumbent Congress-led coalition.
According to dealers, too quick appreciation of the rupee against the dollar is likely to hit exporters and the RBI might intervene in the market to buy dollars. This is, however, fraught with risks as such a move will flood the markets with excess liquidity thereby stoking the tenaciously balanced inflation.
The overnight call money rate (the rate at which banks borrow money from each other to overcome short-term liquidity mismatches) opened higher at 8.20 per cent from the previous close of 7.05 per cent.
The yield on 10-year benchmark 8.83 per cent bond, maturing in 2023, softened sharply to 8.75 per cent against the previous close ofg 8.78 per cent. Bond prices rose to 100.50 (previous close: `100.30). Bond yields and prices move in opposite directions.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.