The Indian rupee rallied to its highest in two months while federal bond yields dropped on Friday morning after the government hiked state-subsidised diesel prices,a move which would help bring down its fiscal deficit.
At 9:08 a.m. (0338 GMT),the partially convertible rupee was at 54.89/90 per dollar,after hitting 54.85,its strongest since Aug. 17. It had closed at 55.43/44 on Thursday.
The benchmark 10-year bond yield was at 8.11 percent,down 6 basis points on the day. The yield had dropped as low as 8.10 percent in opening deals,its lowest since July 26.