The rupee advanced to the strongest level in more than six weeks on optimism that the government will rein in its budget deficit in the next 12 months.
The currency appreciated for a fourth day after Finance Minister Pranab Mukherjee unveiled a budget proposal to help shrink the deficit to 5.5% of gross domestic product in the fiscal starting April 1 from a 16-year high of 6.9% in the current financial year. The government plans to improve its finances by raising more money from sales of state assets, according to Mr Mukherjee.
"The rupee has sustained a positive bias since the Budget unveiled plans to cut the fiscal deficit and boost revenues from privatisation," said PV Rao, Mumbai-based head of foreign-exchange trading at IndusInd Bank.
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