Rupee gains 1 paisa to close at 82.51 against US dollar

Mumbai, Jun 8 (PTI) The rupee appreciated by 1 paisa to close at 82.51 against the US dollar on Thursday, after the Reserve Bank kept the key interest rate unchanged.

At the interbank foreign exchange, the domestic unit opened at 82.59 against the dollar, and finally settled at 82.51, up 1 paisa from its previous close.

During the day, the rupee touched a high of 82.51 and a low of 82.61 against the greenback as a weak dollar and softening of crude oil prices provided support to the Indian currency.

On Wednesday, the rupee had settled at 82.52 against the dollar.

The Reserve Bank of India on Thursday opted for a pause second time in a row, maintaining key benchmark policy rate at 6.5 per cent citing moderate inflation.

The central bank kept its GDP growth projections for the current fiscal (April 2023 to March 2024) unchanged at 6.5 per cent while marginally lowering the retail inflation expectation to 5.1 per cent from the previous 5.2 per cent.

On rupee, RBI Governor Shaktikanta Das said the domestic unit has remained stable since January this year.

“We expect rupee to trade with a slight positive bias as the RBI governor’s statement did not raise any major red flags for the Indian economy except some worries over El Nino and its impact on monsoon,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

“GDP and inflation projections along with a good rabi harvest augur well for the economy. However, any recovery in US dollar and weak global market sentiments may put downside pressure on rupee at higher levels,” Choudhary added.

Traders may also remain cautious ahead of weekly unemployment claims from US. “We expect USDINR spot to trade in between 82.20 to 82.80 in the near-term,” Choudhary said.

Rupee traded in muted range as RBI has maintained its key interest rates unchanged. The central bank highlighted that inflation levels remain elevated, signalling concerns about price pressures in the economy, said Jateen Trivedi, VP Research analyst at LKP Securities.

The RBI expressed its commitment to support growth while keeping inflation under control. But rupee kept range muted as dollar index was weak but capital market faced weakness which kept added pressure on rupee, keeping rupee in small range between 82.52-82.63.

“All eyes are now on the US Fed’s interest rate decision next week. Till then range can be seen at 82.40-82.75,” Trivedi added.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.68 per cent to 103.39.

Brent crude futures, the global oil benchmark, fell 0.75 per cent to USD 76.37 per barrel.

On the domestic equity market front, the 30-share BSE Sensex closed 294.32 points or 0.47 per cent lower at 62,848.64 points. The broader NSE Nifty declined 91.85 points or 0.49 per cent to 18,634.55 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday as they purchased shares worth Rs 212.40 crore, according to exchange data.