Rupee opens 7 paise higher against US dollar

The rupee opened 7 paise higher against the US dollar on Friday, a day after the Reserve Bank of India (RBI) went against the consensus to cut the repo rate by 25 basis points (bps). 

In the previous session, the domestic unit ended 11 paise higher. It consolidated in a narrow range ahead of the important RBI policy statement but rose in the later half after the new RBI Governor Shaktikanta Das surprised market participants with a rate cut. The rate and and change in its policy stance to 'neutral' is likely to boost a slowing economy after a sharp slide in the inflation rate, said Gaurang Somaiya Research Analyst (Currency) at Motilal Oswal Financial Services. 

The cut is a welcome move for the government, who wants to boostlending and lift growth as it faces elections by May. Today, USD/INR pair is expected to quote in the range of 71.40 and 72.20, Somaiya added. 

Foreign investors (FIIs) were the net buyers to the tune of Rs 418.01 crore on Thursday while domestic investors (DIIs) infused a total of Rs 294.11 crore in the capital markets, NSE data showed. 

On the global front, Asian stocks slipped on Friday on worries over global economic slowdown after the European Commission on Thursday sharply cut its forecasts for euro zone economic growth this year and next. MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.3 per cent. This apart, absence of any positive signs in US-China trade row also soured the sentiment.