Rupee strengthens marginally after RBI's policy statement

The Indian unit was trading at Rs 57.75 vs the dollar compared to Rs 57.85 before the policy statement

The rupee appreciated after the release of the mid-quarter review of the monetary policy statement in which the Reserve Bank of India (RBI) kept the repo rate unchanged at 7.25%.

At 11:25 AM the rupee was trading at Rs 57.75 against the dollar compared with Rs 57.85 before the release of the policy statement. But the rupee was still trading weak compared with Friday's close of Rs 57.53 per dollar.

However, the status quo in key policy rates was expected by the street due to which the strengthening in the rupee was not very significant. Many economists had expected that RBI may decide to delay the rate cut in light of the recent weakness in the rupee.

The street awaits the trade deficit data for the month of May to be released at noon which will drive the rupee.

The street is expecting high trade deficit due to massive surge in the import of cheaper gold. That may increase concerns about the current account deficit and take the rupee to the Rs 58 per dollar level, said dealers.