Mumbai, April 8 (PTI): The rupee appreciated 10 paise to settle at 75.93 against the US dollar on Friday, amid the Reserve Bank of India maintaining status quo on the benchmark lending rate.
Announcing the monetary policy, RBI Governor Shaktikanta Das said the Indian economy has large forex reserves and that it stands ready and resolute to defend the economy.
Meanwhile, benchmark 10-year bond yield jumped to 7.06 per cent, the highest since June 2019 as the RBI raised the forecast for the headline consumer-price inflation to 5.7 per cent.
At the interbank forex market, the domestic unit opened at 75.99 against the US dollar and touched an intra-day high of 75.70 and finally closed at 75.93, registering a rise of 10 paise over its previous close.
On Thursday, the rupee had declined 19 paise to close at 76.03.
"The rupee underperformed among Asian currencies after RBI kept interest rate unchanged and announced measures to remove surplus liquidity from the system," said Dilip Parmar, Analyst, HDFC Securities.
Parmar further said that "they also revised down the growth and raised the inflation number for the current year on higher commodity prices. In short, the central bank has paved the way for the removal of the accommodative stance and higher rate going ahead."
"Domestic equities rallied while rupee erased most of its gain after central bank policy decisions and the benchmark 10-year bond yields surged to 7.06 per cent, the highest since 11 June 2019.
In the near-term, spot USDINR is expected to trade in the range of 76.20 to 75.70," Parmar noted.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, "The Rupee appreciated against the US Dollar on Friday as India's Central Bank hinted at exiting its easy monetary stance. However, crude oil prices again rebounded this Friday afternoon session and capped appreciation for the local unit."
On the inflation front for the fiscal year that started April 1, the RBI raised the forecast for the headline consumer-price inflation to 5.7 per cent, from 4.5 per cent earlier.
On a weekly basis, the rupee depreciated by 19 paise against the US dollar.
"For the meantime, the local unit has ended the week on a weaker note against the dollar tracking a sharp sell-off in US Treasuries amid expectations of aggressive withdrawal of policy support by the Federal Reserve," Iyer added.
The US Dollar strengthened towards 100 levels for the first time in nearly two years on Friday evening trade in Asia, supported by the prospect of a more aggressive pace of Federal Reserve interest rate hikes.
Disclaimer: This story is auto-generated from news agency feeds and has not been edited by The Morung Express.
Source: PTI
