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Rupee gains 11 paise to 71.45 vs USD after RBI rate cut

Press Trust of India  |  Mumbai 

The Thursday appreciated by 11 paise to close at 71.45 against the US dollar after the cut the repo rate and changed its policy stance to 'neutral'.

Forex traders said the domestic gained strength after the Thursday cut benchmark lending rate by 0.25 percentage point to 6.25 per

Moreover, easing crude prices and fresh foreign fund inflows also propped up the local unit.

This is the third consecutive session of appreciation for the rupee, during which it has gained 35 paise.

"appreciated after RBI's rate cut decision," Head PCG & Capital Markets Strategy V K Sharma said.

He further said that the and 10-year gilt prices gained Thursday after the cut the repo rate and changed its policy stance to 'neutral' from 'calibrated tightening'.

The RBI also announced removal of a restriction on foreign portfolio investor from having an exposure of more than 20 per of its corporate bond portfolio to a single corporate.

At the Foreign Exchange, the rupee opened on a weak note at 71.73 a dollar. The local unit moved in a range of 71.76 to 71.30 during the session before finally ending at 71.45, a gain of 11 paise over its last close.

On Wednesday, the rupee had settled 1 paise higher at 71.56 against the US dollar.

Analyst, Shares and Stock Brokers, however, noted that the appreciation in the rupee is a temporary phenomenon.

Globally are rising gradually and is a matter of concern for the markets. Besides, trade tension and geopolitical matters also remain cause of worry.

"Hence we expect the rupee to trade in 71-72 range in the near term with the continuing it's depreciation bias," he said.

Brent crude, the global benchmark, was trading at USD 62.33 per barrel, lower by 0.57 per

Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net of Rs 418.01 crore, and domestic institutional investors (DIIs) purchased shares worth Rs 294.11 crore Thursday, provisional data showed.

Benchmark equity indices gave up gains to end almost flat on Thursday as investors booked profits at higher levels, after the the Reserve Bank surprisingly reduced the repo rate by 25 basis points.

After rising nearly 200 points, the 30-share BSE Sensex ended 4.14 points, or 0.01 per cent, lower at 36,971.09; while the broader Nifty settled 6.95 points, or 0.06 per cent, higher at 11,069.40.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.21 per cent to 96.59.

The (FBIL) set the reference rate for the rupee/dollar at 71.4688 and for rupee/euro at 81.2024. The reference rate for rupee/British pound was fixed at 92.4478 and for rupee/100 Japanese yen at 65.00.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 07 2019. 18:15 IST