Major developments:

• USD is now at 77.63. USDINR opened at 77.68. Today, the pair could trade in the 77.54-77.78 Zone. 
• Govt has cut excise duty on Petrol and Diesel by Rs 8 and Rs 6 respectively and some  states have started to cut rates marginally.
• With this cut, excise duty is now back to pre pandemic level. Govt has taken steps to curb prices through 1)Ban on export of Wheat, 2) Reduction of duty on plastics and raw materials for steel , 3) Duty reduction on coking coal. 4)Rs 200 subsidy on Gas cylinder for those eligible under Ujwala scheme, 5) Increase in fertiliser subsidy to contain pressure due to increase in international prices.
• These steps will help in overall inflation management. There are fears that fiscal deficit could expand from 6.4% to 6.8% of GDP.

However, Govt has taken a conservative budget calculation on growth and GST revenue. Increased GST and Direct tax revenue could help to offset excise reduction and Gas/Fertiliser subsidy.

RBI will still increase rates and manage liquidity to mitigate demand side inflation.

-USDINR is at 77.63 .Prior day’s close was 77.54.

-Indian Equity indices climb.

-Indian 10 year G-SEC yield is at 7.37%.

-USDINR 1 yr fwd premia is at 3.80%.

USDINR @ 77.63, EUR/USD 1.0591, GBP/USD @ 1.2544, USD/JPY @ 127.44, EUR/INR @ 82.24, GBP/INR @ 97.41 JPY/INR @ 60.85

Gold@1845, WTI Crude @ 110.35, Nifty @ 16330(+65), 10 Year G-SEC @ 7.37%.

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