Rupee rises 6 paise ahead of RBI policy

Currency's gain came after speculation that RBI could cut rates to help boost economic growth fuelled expectations of foreign fund inflows, says Admisi Forex

Ahead of RBI credit policy, the Indian rupee today ended 6 paise higher at 61.80 against the American currency on fag-end selling pressure from banks and exporters due to a weak dollar in the overseas markets.

The rupee resumed lower at 62.00 per dollar as against last weekend's level of 61.86 at the Interbank Foreign Exchange (Forex). It moved down further to 62.01 per dollar on initial dollar demand from banks.

However, it recovered immediately to end at 61.80 per dollar on selling of dollars by banks and exporters, showing a gain of six paise or 0.10%.

Intra-day, it hovered in a range of 61.76 and 62.01.

The dollar index was down by 0.14% against a basket of major global rivals.

"Rupee appreciated against the Dollar to start the week on a positive note supported by dollar sales and foreign inflows. Rupee's gain came after speculation that RBI could cut rates to help boost economic growth fuelled expectations of foreign fund inflows," said Admisi Forex India Pvt Ltd, Director, Suresh Nair.

In the international market, the greenback met with selling pressure earlier in the morning, in line with the weak tone it has exhibited since Friday when weaker-than-expected US GDP figures for December quarter helped moderate he currency market's expectation for higher interest rates.

A downbeat reading for China's official manufacturing purchasing managers index Sunday also prompted selling of the US dollars.

Meanwhile, the benchmark BSE Sensex recovered from initial losses but ended lower by 60.68 points or 0.21% at 29,122.27.