The rupee closed at 83.495/$1, versus the previous close at 83.50/$1, Bloomberg data showed.
Foreign investors bought Rs. 2,575 crores worth of Indian equity and Rs. 1,180 crores in fully accessible Indian government bonds, BSE and CCIL data showed.
Brent crude oil traded at $86.86 per barrel, Reuters data showed. “Crude oil is a cause of concern because it is going near 87 dollars. There is pressure coming from oil marketing companies that are buying crude in anticipation that it might rise further”, said Ritesh Bhansali, Vice President at Mecklai Financial Services.
A rise in crude oil prices poses upside risks to Indias’ trade deficit and inflation as the country is a major importer of the commodity. The 10-year benchmark government bond yields closed at 6.99% on Thursday, unchanged from the previous close, CCIL data showed. Some bond traders are hopeful of the Centre potentially announcing a reduction in its gross borrowing in the full Budget for 2024-25, which is set to be detailed later this month. In the interim Budget detailed in February, the Centre had pegged its gross borrowing for FY25 at Rs 14.13 lakh crore. A large surplus dividend transfer from the RBI to the government this year has sparked hopes of the Centre achieving a quicker pace of fiscal consolidation and hence bringing down its borrowing
RBI data showed that the central bank absorbed Rs 1.25 lakh crore from banks as on July 3. An absorption of funds by the RBI implies surplus liquidity with banks.
“This month and the first half of August things should be fine from the liquidity perspective as government bonds are maturing at the end of July”, a trader said.
