Rupee hits 4-week high against US dollar

The rupee strengthened by 9 paise to hit a four-week high of 64.78 against the US dollar on Tuesday, as bond yields fell 25 basis points after the government announced lower-than-expected borrowing plan for the first half of FY19.

The government said it will borrow Rs 2.88 lakh crore in the April-September period of 2018-19, lower than Rs 3.72 lakh crore it had borrowed in the first half of the current fiscal, and introduce bonds linked to CPI or retail inflation.

The US dollar, however, had strengthened against some currencies overseas amid reports of trade negotiations between the US and China, which eased fears of a trade war and improved investors’ appetite for riskier assets.

A positive opening for the stock market also boosted the domestic currency, dealers said.

On Monday, the rupee had gained 14 paise to end near a two-week high of 64.87 against the US currency on sustained dollar unwinding by exporters and banks.

Meanwhile, the benchmark BSE Sensex was trading over a 100 points higher at 33,171.29, while the broader NSE Nifty was up 0.35% or 35 points at 10,165.90 at 10.50 am.