Mumbai: The rupee appreciated 4 paise to settle at 83.21 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. 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 per cent in its monetary policy meeting so as to achieve its medium-term target of 4 per cent inflation. “
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. “A no-surprise monetary policy by the RBI may also support the domestic currency. However, FII outflows may cap a sharp upside. Traders may take cues from US non-farm payrolls reports, average hourly earnings and unemployment rate data. USD/INR spot price is expected to trade in a range of Rs 82.80 to Rs 83.70,” Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02 per cent lower at 106.31.
