The Indian rupee appreciated by 9 paise against the US dollar to close at 83.30 (provisional) on Friday. This gain followed the Reserve Bank of India’s decision to maintain the benchmark interest rate at 6.5 percent for the seventh consecutive time. Despite this positive movement, the rupee’s ascent was curtailed by the strength of the US dollar against major global currencies and the persistently high crude oil prices, according to forex traders. Starting the day at 83.44 against the dollar in the interbank foreign exchange market, the rupee saw fluctuations, reaching an intraday high of 83.26 and a low of 83.45. Ultimately, it settled at 83.30 (provisional), marking a 9 paise increase from its previous close. The previous day, the rupee had recovered by 14 paise to finish at 83.39 against the US dollar.
The rupee strengthened against the US dollar following the RBI’s decision to maintain the benchmark interest rate at 6.5 percent. Despite facing resistance from a strong US dollar and high crude oil prices, the rupee closed at 83.30 against the dollar, marking a 9-paise increase from its previous close.
The Reserve Bank of India’s Monetary Policy Committee (MPC) made its decision after thoroughly assessing macroeconomic and financial developments and outlook. Governor Shaktikanta Das announced that the MPC, with a 5 to 1 majority, chose to maintain the policy repo rate at 6.50 percent. This decision reflects the committee’s commitment to gradually withdrawing accommodation to align inflation with the target while supporting economic growth.During the unveiling of the first bi-monthly monetary policy for the fiscal year, the RBI retained its growth and inflation forecasts at 7 percent and 4.5 percent, respectively.
This decision indicates the central bank’s confidence in the economic outlook despite prevailing challenges.Market analysts anticipate the rupee to experience a slight negative bias due to risk aversion in global markets and the strength of the US dollar. Factors such as elevated crude oil prices and Foreign Institutional Investor (FII) outflows may also contribute to downward pressure on the rupee.Meanwhile, the dollar index, which measures the dollar’s performance against a basket of major currencies, recorded a modest increase, trading at 104.24. Brent crude futures, a key indicator of global oil prices, saw a slight uptick, reaching USD 90.73 per barrel.On the domestic front, the stock market showed mixed performance, with the Sensex gaining marginally by 20.59 points to close at 74,248.22, while the Nifty edged up by 0.95 points to settle at 22,513.70.Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, offloading shares worth Rs 1,136.47 crore, as per exchange data. This trend suggests cautious investor sentiment amidst prevailing market conditions.
