Rupee and bonds steady ahead of Budget

The rupee Wednesday ended a tad higher against the dollar ahead of the Union Budget that is expected to spell out reform measures to spur New Delhi's economic growth.

The local unit rose a marginal five paise to close at 68.89 a dollar almost in line with other emerging market currencies.

During the day's trading it gained up to 68.95 a dollar with many traders shying away from taking any fresh trading positions.


It was a lacklustre trading session with the Budget around the corner. All investors are waiting for the Union Budget before they begin to take new bets," said a trader from a foreign bank. Investors are waiting for policy cues.

Crude oil prices were at $63.16 a barrel versus 62.09 a day earlier. A rise in oil prices bears bad news for India, which meets three-fourths of its oil requirements via overseas shipments.

"Rising crude oil prices and foreign fund outflows weighed on the domestic currency and restricted its rise," said another trader from a large private bank.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell marginally by 0.03 per cent to 96.70.

The benchmark government bond yield was little changed at 6.83 Wednesday, lowest level since June 20.