Mumbai: The Indian rupee rose and bond yields fell on Wednesday after lower inflation numbers, which came below estimates, fuelled hopes that the Reserve Bank of India (RBI) would leave the policy rate steady in its January monetary policy.
India’s wholesale price inflation eased to a five-month low of 6.16% in December from a 14-month high of 7.52% in November, helped by softening vegetable prices, government data showed.
The wholesale price index’s annual rise compared with a 7% jump forecast by economists in a Reuters poll.
At 12.39pm, the domestic currency was trading at 61.43, up 0.13% from previous close. The 30-share bellwether BSE Sensex was trading at 21,182.28 points, up 0.76%.
Earlier, the rupee opened at 61.67 per dollar on Wednesday against its Monday’s close of 61.52. The currency market was closed for a holiday on Tuesday.
The dollar index, which measures the US currency’s strength against major currencies, was at 80.836, up 0.22% from the previous close of 80.662.
The yield on India’s 10-year benchmark bond was at 8.633%, compared with its Monday’s close of 8.71%. This is the lowest yield for this paper. Bond yields and prices move in opposite directions.
Consumer price based inflation slowed to a three-month low of 9.87% in December, against analysts’ expectations of around 10%, data released on Monday showed.
In its monetary policy on 18 December, the Reserve Bank left its key policy rate unchanged at 7.75%.
