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The Indian rupee (INR) moved higher on Friday amid modest losses in the US dollar. Indian Finance Minister Nirmala Sitharaman will announce India’s mid-term budget for the fiscal year 2024-25 (FY25) on February 1. The 2024-25 fiscal year budget will focus primarily on government spending, with no major changes expected until a new government takes power after the election.
The budget is expected to target narrowing the fiscal deficit to 5.30% of GDP in 2024-25. The Indian government is preparing to increase welfare spending and may reduce the budget deficit to 4.5% of GDP in 2025-26.
Friday’s highlight will be the release of the U.S. core personal consumption expenditures price index (Core PCE) for December, the Fed’s preferred inflation gauge. Core PCE is expected to increase 0.2% month over month and 3.0% year over year. Indian markets will be closed on Friday for Republic Day.
