Rupee slips 2 paise to 81.92 against USD post-RBI policy decision

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the Indian rupees trimmed initial losses and settled 2 paise down at 81.92 (tentative) against the US dollar on Thursday after The Reserve Bank of India decided to maintain its key benchmark interest rate at 6.5 per cent.

Forex traders said that the Indian rupee has seen fluctuations yet Reserve Bank of India (RBI) The market was surprised by stopping the rate hike.

In the interbank foreign exchange market, the local unit opened weak at 81.95 against the dollar, and closed the day at 81.92 (temporary), down 2 baisas from its previous close. On Wednesday, the rupee rose 42 pounds to close at 81.90 against the US dollar.

The Reserve Bank of India (RBI) on Thursday decided to keep its key benchmark interest rate at 6.5 per cent even as inflation trended above its tolerance level. The rate hike has been paused after six consecutive rate increases combined to 250 basis points since May 2022.

On the rupee, Reserve Bank Governor Shaktikanta Das said the Indian rupee has moved in an orderly manner in calendar year 2022 and remains so in 2023 as well.

This reflects the strength of domestic macroeconomic fundamentals and the resilience of the Indian economy in the face of global repercussions.

He added that the RBI remains vigilant and focused on maintaining the stability of the Indian Rupee.

According to Dilip Parmar, Research Analyst, HDFC Securities, the domestic unit eased initially but strengthened after the recovery in local stocks supported by foreign money inflows, Parmar said.

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“With today’s pause, carry trade has returned to the rupee. The spread between the Indian bond yield premium to the US makes the rupee more attractive as a carry target,” Parmar noted.

Parmar said that in the near term, spot USDINR is expected to trade between 81.70 to 82.50 with a bearish slope.

Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six currencies, rose 0.08 percent to 101.93.

Brent crude futures, the global oil benchmark, fell 0.16 percent to $84.85 a barrel.

in the local stock market, BSE Sensex, which includes 30 shares, closed at 143.66 points, up 0.24 percent. at 59,832.97 points. The broader NSE Nifty index advanced 42.10 points, or 0.24 percent, to 17,599.15 points.

Foreign institutional investors (FIIs) were net buyers in the capital markets on Wednesday buying shares worth Rs 806.82 crore, according to exchange data.