The budget announced a fiscal deficit target of 3.9% of GDP for the fiscal year starting in April, higher than an expected 3.6%. Photo: AFP
Mumbai: Indian bonds and the rupee fell in early trading on Monday after the government set a higher-than-expected fiscal deficit target for the 2015-16 year as part of the budget unveiled on Saturday.
The budget announced a fiscal deficit target of 3.9% of gross domestic product (GDP) for the fiscal year starting in April, higher than an expected 3.6%.
The government also said it would cut the deficit to 3% of GDP by 2017-18 fiscal year, one year later than expected.
The benchmark 10-year bond yield rose 3 basis points to 7.75% initially, and was trading up 1 basis point at 7.73% from its Friday close by 9:21am. One basis point is one-hundredth of a percentage point. Bond prices and yields move in opposite directions
The rupee weakened slightly to 61.86 per dollar compared with its 61.83/84 close on Friday, tracking Asian peers after China’s central bank cut interest rates on Saturday. Reuters
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