Indian rupee, the local currency traded tad lower on Friday at 74.98 per dollar, down 4 paise, on back of weak domestic equities and emergence of demand for the US currency from banks and importers.
The domestic unit opened on a weak note at the foreign bank exchange to touch a low of 75.04 before staging a quick mild recovery.The US dollar index, which gauges the value of the greenback against a basket of key global currencies, rose 0.32 per cent to 93.08.
The Indian currency still traded in the red after ending unchanged on Thursday after the RBI decided to maintain a status quo in its policy rates. Indian Rupee ended almost unchanged compared to its earlier close at 74.93 per dollar on Thursday.
On Rupee's near term outlook, Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking said," Despite the pause, rupee still remains in a sticky range of 74.50-75.50, and the domestic currency will be guided more by the movement in the dollar index, which is languishing at two- year lows and the pace at which the RBI will look to accumulate its forex reserves. Expectations of dollar inflows are capping upside for the pair (USD/INR), while the downside is being protected by the RBI."
Keeping interest rates unchanged to help tame inflation, the central bank decided to continue with the accommodative stance of monetary policy as long as necessary to revive growth.
Analysts, however, are of the view that the Reserve Bank expecting the inflation at elevated levels until September before easing and economic growth to shrink would exert pressure on the forex market in the near term.
Foreign investors infused Rs 637.43 crore on a net basis into Indian equities on Thursday, exchange data showed.
Global crude oil benchmark Brent was trading marginally lower at USD 45.08 a barrel.
On the domestic equities front, the BSE Sensex was down 75.60 points or 0.20 per cent at 37,949.85; while the NSE Nifty traded 11.70 points or 0.10 per cent lower at 11,188.45.
Meanwhile, coronavirus cases in India surpassed 20 lakh mark today, with total deaths standing at 0.41 lakh. Worldwide, there are 189 lakh confirmed cases and 7.17 lakh deaths from the coronavirus COVID-19 outbreak.