Mumbai: After hitting a fresh record low of 74.48 the Indian rupee is trading lower by 18 paise at 74.38 per dollar. It opened lower by 10 paise at 74.30 per dollar versus previous close 74.20.
The benchmark 10-year government bond yield stood at 7.999% from its previous close of 8.031%. Bond yields and prices move in opposite directions.
The cut in excise duty raised worries of fiscal slippage among the traders. The government on Wednesday cut excise duty on jet fuel from 14% to 11% to help keep airfares under check and to give relief to airlines troubled by high fuel prices. Last week, the government cut excise duty on petrol and diesel by Rs 1.50 a litre.
The rupee is expected to stay low a while
India’s battered rupee is expected to stay that way for a while, trading near recent record lows over the coming year even as the Reserve Bank of India is forecast to raise rates in December and once more in 2019, Reuters polling found.
Strong demand for the American currency from importers amid unabated foreign fund outflows and sharp losses in the domestic equity market hurt the sentiment. Concerns of fears of rising fiscal deficit also weighed on the domestic currency.