Rupee rises 4 paise to close at 83.21 against U.S. dollar
The Hindu
RBI kept repo rate unchanged, rupee appreciated 4 paise to 83.21, FII outflows may cap sharp upside. Domestic markets, decline in crude oil prices, softness of US dollar, and no-surprise monetary policy by RBI supported the rupee. US non-farm payrolls, average hourly earnings, and unemployment rate data to be watched. BSE Sensex ended 0.55% higher, FII net sellers in capital market.
The rupee appreciated 4 paise to settle at 83.21 (provisional) against the US dollar on Friday amid positive equity markets as the Reserve Bank kept the repo rate unchanged in its fourth consecutive monetary policy review.
Selling pressure from foreign equity investors amid elevated levels of the greenback, however, restricted the upward movement of the local currency, according to forex traders.
At the interbank foreign exchange, the domestic unit opened at 83.21 against the dollar and traded between a high of 83.28 and a low of 83.18. It finally settled at 83.21 (provisional) against the dollar, up 4 paise over Thursday's closing level of 83.25.
The six-member monetary policy committee of the Reserve Bank of India on Friday held the benchmark repurchase rate (repo) at 6.50% in a unanimous decision for the fourth policy review meeting in a row.
Noting that inflation remains a risk, the RBI also signalled that it would keep liquidity tight by using bond sales to bring prices closer to the target.
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said: "Indian rupee appreciated slightly as the RBI maintained status quo and kept the repo rate unchanged at 6.5% in its monetary policy meeting so as to achieve its medium-term target of 4% inflation.
"According to the RBI, Indian economic activity has shown resilience, and the overall macroeconomic indicators remain favourable with strong manufacturing and services PMI numbers. GDP and CPI inflation projections too were maintained." He further said that positive domestic markets and a decline in crude oil prices supported the rupee. Also, the softness of the US dollar may support the domestic currency.
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