Rupee jumps 27 paise to open at 82.82 a dollar on JPMorgan India bond inclusion
The Indian rupee opened 27 paise higher against the US dollar on Friday after JPMorgan’s announcement to include India in emerging market bond index, which is expected to lead to billions of dollars worth inflows. The local currency opened at 82.82 a dollar as compared to previous close of 83.09.
The 7.18% 2033 Government Bond yield opened at 7.08% versus Thursday’s close of 7.14%.
The US dollar index reached 105.74 on Thursday, the highest in over six months, while the US 10-year Treasury yield climbed to 4.50%, the highest since 2007, on expectations that the US Federal Reserve will hold rates higher for longer.
On Thursday, the rupee depreciated marginally to end 2 paise lower at 83.09.
Indian government bonds will be included in the Government Bond Index-Emerging Markets index and the index suite, JPMorgan said on Friday.
The inclusion will start on June 28, 2024, and extend over 10 months with 1% increments on its index weighting. India is expected to reach the maximum weighting of 10%, JPMorgan added.
Read here: JPMorgan to include India in its emerging market debt index, paving the way for billions in inflows
The index inclusion could result in inflows of about $24 billion into eligible government bonds from the start of next year to May 2025, IDFC First Bank said in a note, Reuters reported.
Crude oil prices traded higher, limiting upside for the rupee.
Brent futures rose 0.55% to $93.81 a barrel, while US West Texas Intermediate crude (WTI) gained 0.71% to $90.27.
On the domestic front, the Indian benchmark equity indices, Sensex and Nifty were trading marginally lower in the pre-opening session.
On Thursday, the Foreign institutional investors (FIIs) net sold Indian shares worth ₹3,007.36 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹1,158.14 crore, as per provisional data available on the exchanges.
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Updated: 22 Sep 2023, 09:10 AM IST
