The rupee gained 15 paise to 73.09 against the US dollar in early trade on Friday after the Reserve Bank of India kept the repo rate unchanged at 4% in its Monetary Policy Committee (MPC) meet outcome today. Moreover, the domestic currency benchamrk was rising today, amid weakness in dollar on back of revived hopes for a US stimulus deal.
The rupee opened at 73.21 per dollar at the interbank forex market, and gained further ground to touch 73.09, rising 15 paise from its previous close of 73.24 per US dollar.
Maintaining status quo for the second time in a row, Reserve Bank of India (RBI) on Friday decided to keep benchmark interest rate unchanged at 4 per cent. RBI has retained an accommodative stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis.
RBI Governor Shaktikanta Das said that the mood of the nation has shifted from fear and despair to confidence and hope. He added that the inflation is likely to ease to projected target by the fourth quarter of this fiscal. Governor Das said that India is likely to witness a three-speed recovery with individual sectors showing varying paces depending on sector-specific realities.
Das said that the sectors that showed resilience in the face of the pandemic are likely to be the ones to revive first. The Governor said agriculture, power, consumer goods, pharma and two-wheelers will see quick recovery.
Meanwhile, the dollar index that fell 0.15 per cent to 93.46 against its rivals today, was headed for a second straight weekly fall after President Donald Trump said talks with Congress had restarted.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 66.97 points higher at 40,249.64, and the broader NSE Nifty rose 24.45 points to 40,249.64.
Foreign portfolio investors (FPIs) bought shares worth Rs 978.37 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 19.85 crore in the Indian equity market on 8 October, provisional data showed.
Brent crude futures, the global oil benchmark, fell 0.16 per cent to USD 43.27 per barrel. Oil price fell on the back of output halt ahead of a storm in Gulf of Mexico and the after weighing possibility of supply disruption in Norway.
Worldwide, there were 367 lakh confirmed cases and 10.66 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 69-lakh mark and the death toll from COVID-19 infections rose to 10.6 lakh, as of today.
Commenting on the currency, Anuj Gupta - DVP- Commodities and Currencies Research, Angel Broking said," As expected yesterday USDINR appreciated by 0.07% and closed at 73.21 levels due to weakness in the dollar index. Performing equity market also supports the currency and expectation of positive economic data also supportive for the currency. India's services sector, hit severely due to the over two-month long pandemic-induced lockdown, neared recovery in September, with the PMI for services rising to 49.8 from 41.8 in August. US FED officials worried that a lack of further fiscal stimulus would jeopardize an economic recovery that was moving faster than expected, according to meeting minutes.
On today's technical outlook, he added,"As of today traders can go for sell in USDINR at 73.40, with the stop loss of 73.70 and for the target of 72.80. We are expecting appreciation in USDINR in short term and it may test 72.50 levels soon."