The rupee rose to a seven-week high on speculation an improving economy and rising interest rates would spur overseas demand for the nation’s assets.
Global funds on August 5 bought more Indian shares than they sold for a 23rd day. They pumped in $4.3 billion (Rs 19,836 crore) in that time, lifting their holdings to $83.8 billion (Rs 3,86,569 crore), Securities & Exchange Board of India data showed.
The rupee appreciated 0.1 per cent to 46.13 per dollar as of the 5 pm close in Mumbai, the highest since June 21. It touched 45.96 on August 6, the strongest intraday level since June 22. The currency has risen 1.3 per cent in the past month.
Bonds rise on speculation RBI to pause on rates
Ten-year bonds climbed for a second day, pushing their yield to the lowest level in almost a week, on speculation RBI would refrain from increasing interest rates at its policy review next month.
The yield on the 7.80 per cent note due in May 2020 fell two basis point, or 0.02 percentage point, to 7.81 per cent as of the 5:00 pm close in Mumbai, according to the central bank’s trading system. The price rose 0.11 per cent, or 11 paise per Rs 100 face amount, to Rs 99.90.
RBI increased the reverse-repurchase rate, at which it absorbs excess cash from banks, by half a per centage point to 4.5 per cent at the last review.