Rupee rises 3 paise to 72.93 post RBI rate decision

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Mumbai, Feb 5 (PTI) The rupee gained 3 paise to settle at 72.93 against the US dollar on Friday after the Reserve Bank kept the policy rate unchanged but maintained its accommodative stance to spur growth.

At the interbank forex market, the local unit opened at 72.98 against the greenback and witnessed an intra-day high of 72.80 and a low of 72.99.

It finally ended at 72.93 against the American currency, registering a rise of 3 paise from its previous close.

On Thursday, the rupee had settled at 72.96 against the American currency.

'Indian Rupee gained strength amid surge in domestic markets and as Reserve Bank of India kept repo rate unchanged at 4.0 per cent and maintained its accommodative stance. However, sharp upside was prevented on strong dollar and surge in crude oil prices,' said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

The six-member Monetary Policy Committee (MPC) voted to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target, Governor Shaktikanta Das said.

With green shoots of recovery clearly visible, the RBI pegged GDP growth in the fiscal year beginning April 1, 2021 at 10.5 per cent, a tad lower than 11 per cent predicted by the government's Economic Survey last week.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.13 per cent to 91.41.

On the domestic equity market front, the BSE Sensex ended 117.34 points or 0.23 per cent higher at 50,731.63, while the broader NSE Nifty climbed 28.60 points or 0.19 per cent to 14,924.25.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,936.74 crore on Thursday, according to exchange data.

Brent crude futures, the global oil benchmark, rose 1.24 per cent to USD 59.57 per barrel.

On a weekly basis, the rupee gained 3 paise against the American currency.

'The Indian Rupee ended with small gain on Friday but was little changed against the US currency this week, as persistent dollar bids by the Reserve Bank of India, offset the impact of foreign equity inflows,' said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Meanwhile, Asian currencies were broadly weaker this week tracking gains in the US dollar index.

'The Dollar Index was weak this Friday ahead of the payroll number tonight but was headed for its best weekly gain in three months lifted by growing confidence that the US economic recovery will outpace its global peers,' Iyer noted.

According to Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services, 'after the Budget, it was obvious that RBI wouldn’t spoil the party. The MPC stance was more on the lines with our expectations of keeping the repo rate unchanged with accommodative stance.' The positive take away for currency market was the growth projection, rupee surged after the real GDP growth was projected at 10.5 per cent for FY22, he said.

'The USD-INR spot's outlook depends on risk sentiments, which will continue to pick up as nations are lifting travel restrictions. With hopes of liquidity unswerving global economic stimulus we expect the downward trend to continue in USD-INR spot,' he noted. PTI DRR ABM ABM