Indian Rupee gains on Friday - Aditya Birla Money

The Indian Rupee gained on Friday, soaring to two-week high against the US dollar. But, sharp gains were capped on the back of Standard and Poor's (S&P) statement that continued to remain skeptical over India's credit ratings.

An analyst f rom the credit rating agency said on Friday that the slowdown in India's economic grow th is less supportive for the country's sovereign credit ratings, raising concerns that the recent policies brought up by India's finance minister will do a little to avoid a credit downgrade. The credit rating agency further added that the government may f ind it difficult to meet the revenue projections in the next fiscal year.

S&P had cut India's outlook to negative from stable last year, and also indicated a one-in-three possibility of a ratings downgrade. Currently India's rating as per S&P stands at BBB-minus.

India 's Wholesale Price Index (WPI) rose 6.84% in February, higher than market forecasts of 6.5%. In January, the WPI index had rose 6.62%. Despite the overall inflation coming higher, market participants are expecting a rate cut of at least 25 basis points in the repo rate in the upcoming monetary policy on March 19th.

The Euro tumbled in the Asian trade today after Cyprus bailout deal announced on weekend included some controversial haircuts on bank deposits. The Euro fell to around 1.290 levels against the US dollar, down more than 1% at around 8.30 AM IST.

On the back of this, the Rupee may also open low er against the dollar in the opening trade. Risk aversion in the global markets may lead to depreciation in the Rupee.

Source : Equity Bulls

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