MUMBAI: The
rupee
closed at 83.11 against the
dollar
in the interbank foreign exchange market on Monday, gaining 31 paise from its last close. Meanwhile, the 10-year bond fell below the 7% mark.
The bond and forex markets rose due to the influx of dollars from foreign institutional investors and positive market sentiment after the exit polls predicted a victory for the ruling
NDA
.
This Monday marked the largest single-day gain for the domestic currency in over five months.
The
forex market
opened on a positive note following the announcement of the GDP numbers for Q4 FY24 at 7.8%. Although the rupee reached a high of 82.98 against the dollar in early morning trading, it weakened due to demand from importers.
According to Jateen Trivedi, research analyst at LKP Securities, "Expectations of current govt winning by a good margin attracted rupee buyers, anticipating positive fund flows. The trend remains volatile due to dollar fluctuations, but the rupee is expected to maintain its strength if the election results align with exit polls."
In addition to the short-term gains attributed to markets being reassured with policy continuity, the return of the NDA is viewed positively for managing current account deficit. "Macro stability is one of the NDA's key achievements and we expect that to continue. The fiscal consolidation path should continue. We also expect the CAD to be moderate, implying very little pressure on the rupee," said Emkay Finance in a note.
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