MUMBAI: The Indian rupee marginally rose on Tuesday, tracking a rise in most of its Asian peers and as investors awaited the presentation of India’s budget later in the day.
The rupee was at 83.6250 against the US dollar as of 09:30 a.m. IST, up slightly from its close of 83.6575 in the previous session.
The local currency had slipped to its weakest level on record on Monday as sustained dollar demand from local importers weighed in recent sessions, while the Reserve Bank of India’s absorption of dollar inflows curbed room for appreciation.
Asian currencies were mostly stronger, with the Korean won up 0.3% and leading gains.
The dollar index was little changed at 104.2.
Investors will keep their focus on Indian Prime Minister Narendra Modi’s first post-election budget, due at 11:00 a.m. IST.
The budget is expected to lay out an economic vision that balances fiscal prudence with the expectations of disgruntled voters and the demands of his coalition partners.
Indian rupee ends little changed
The government’s fiscal deficit target and gross market borrowing estimates for financial year will be among the key numbers investors pay close attention to.
Median forecasts in a Reuters poll showed the fiscal deficit target at 5.1%, matching February’s interim budget.
Broadly, the rupee is “anticipated to stabilise within the range of 83.40-83.70,” Amit Pabari, managing director at FX advisory firm CR Forex said.
Meanwhile, dollar-rupee forward premiums slipped, with the 1-year implied yield down 1 basis point at 1.74%.
Forward premiums are likely decline by another 2-4 basis points if the government lowers its gross borrowing estimate and fiscal deficit target, a foreign exchange trader at a state-run bank said.
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