Indian bonds, rupee rally post fuel price hike

MUMBAI: The Indian rupee rallied to its highest in two months while federal bond yields dropped on Friday morning after the government hiked state-subsidised diesel prices, a move which would help bring down its fiscal deficit.

At 9:08 a.m. (0338 GMT), the partially convertible rupee was at 54.89/90 per dollar, after hitting 54.85, its strongest since Aug. 17. It had closed at 55.43/44 on Thursday.

The benchmark 10-year bond yield was at 8.11 percent, down 6 basis points on the day. The yield had dropped as low as 8.10 percent in opening deals, its lowest since July 26.