NEW DELHI: The rupee opened nearly 6 paise higher at 67.84 against the dollar on Wednesday amid selling of the greenback amid expectation of a rate cut by the Reserve Bank of India later in the day.
The domestic equity market opened on a flat note with a positive bias, following mixed global cues.
Benchmark BSE Sensex was trading 47.90 points, or 0.18 per cent, higher at 26,440 in early trade, while NSE's Nifty50 was up 18.85 points, or 0.23 per cent, at 8,162.
The domestic currency staged a strong recovery on Tuesday and closed 31 paise higher at 67.90 against the dollar, its highest level in three weeks.
ICICI Securities said the rupee rose to a near-three-week high against the dollar amid rising risk appetite as the euro shrugged off concerns over the fallout of the referendum in Italy. Expectation of a rate cut by the Reserve Bank of India on Wednesday further supported the currency.
Government bonds also rose for the second day on Tuesday, amid expectation that the Monetary Policy Committee of RBI would cut the benchmark interest rate. Rate cut hopes have increased since the government decision to withdraw high denomination currency notes.
The benchmark 6.97 per cent bond maturing in 2026 ended at Rs 105.55 on Tuesday compared with Rs 105.44 the previous day. Bond yields eased to 6.20 per cent from 6.22 per cent.
The rupee also got some strength against the greenback after the apex bank decided to raise the ceiling for issue of securities under the market stabilisation scheme (MSS) to curb excess liquidity in the banking sector stemming from demonetisation.
Source: http://economictimes.indiatimes.com/