Rupee gains 13 paise against US dollar

The rupee gained 13 paise to settle at 95.15 (provisional) against the US dollar on Wednesday, after the Reserve Bank of India kept the key policy rate unchanged for the third time in a row in FY27 amid the West Asia crisis.

Forex traders said investor sentiments were supported by an overnight decline in crude oil prices and a weakness of the American currency in the overseas market.

Moreover, a decline in US treasury yields also supported the rupee.

At the interbank foreign exchange, the rupee opened at 94.90 against the greenback and traded in a tight range of 94.89-95.25 during the session. It eventually settled at 95.15, higher by 13 paise from its previous close.

On Tuesday, the rupee appreciated 9 paise to close at 95.28 against the American currency.

“We expect the rupee to trade with a slight positive bias on improved global risk sentiments amid de-escalation of tensions between the US and Iran. The US said that a deal with Iran could be reached soon. Traders may take cues from ISM services PMI data from the US. USD-INR spot price is expected to trade in a range of 94.80 to 95.50,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.

The six-member Monetary Policy Committee, headed by Governor Sanjay Malhotra, unanimously voted to keep the repo rate unchanged at 5.25 per cent and retained its “neutral” policy stance.

The RBI relied on measures announced at its previous policy meeting to attract capital inflows and support the rupee.

Speaking to reporters at the customary briefing after the monetary policy review, Malhotra said the rupee has not appreciated as intended despite the high flows from foreign shores.

He further noted that the strengthening in the rupee is possible if geopolitical tensions de-escalate. It will be the RBI’s endeavour that the trajectory for the rupee remains orderly, he added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.82, down 0.03 per cent.

Brent crude, the global oil benchmark, was trading higher by 1.75 per cent at USD 80.75 per barrel in futures trade, but was down sharply from above USD 100 per barrel levels seen in July.

On the domestic equity market front, Sensex climbed 152.05 points to settle at 78,581, while the Nifty closed marginally up by 9.75 points to 24,624.65.

Foreign institutional investors purchased equities worth `2,446.47 crore on a net basis on Tuesday, according to exchange data.