The Indian rupee rose sharply in the last hour of trade to settle 24 paise higher at 71.29 to the US dollar on Thursday after the RBI promised to continue with accommodative stance in its monetary policy.
The central bank, however, decided to keep key interest rate unchanged in its fifth bi-monthly monetary policy for this ongoing fiscal, a move that widely surprised investors who were expecting at least 25 basis points cut in policy rate.
The Indian unit traded on a flat note for a better part of the session but briefly fell post RBI monetary policy announcement. It recovered swiftly mainly in the last hour of trade to close at 71.29, up 24 paise over its previous close.
The rupee’s rise was also supported by weaker dollar against key global currencies.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.16 per cent at 97.49.