On Friday, the Indian rupee saw an uptick, supported by increased dollar sales from both foreign and state-run banks, following the Reserve Bank of India’s decision to maintain interest rates for the seventh consecutive meeting.
Closing at 83.2950 against the U.S. dollar, the rupee marked a nearly 0.2% rise compared to its previous session’s close of 83.4375.
Over the week, the currency showed a modest 0.1% gain, bouncing back from its record low of 83.4550 reached on Thursday.
Despite weak global cues, dollar sales surged as the rupee managed to stay above the 83.45 mark, noted an FX trader at a foreign bank.
Early in the session, concerns arose from Brent crude oil prices surpassing $90 per barrel for the first time since October and hawkish sentiments expressed by Federal Reserve policymakers.
Following the Reserve Bank of India’s (RBI) policy decision, foreign and state-run banks engaged in dollar sales, a move that contributed to the strengthening of the rupee, according to traders.
As the rupee surpassed the 83.35 mark, triggering stop losses, traders holding long dollar positions opted to exit, as reported by a trader from a foreign bank.
During the RBI’s rate-setting committee meeting, five out of six members advocated for a pause, maintaining the monetary stance at ‘withdrawal of accommodation’.
RBI Governor Shaktikanta Das emphasized India’s robust growth prospects, indicating that the central bank’s focus remains on managing inflation.
Investor attention is now turned towards the upcoming U.S. non-farm payrolls report scheduled for release later on Friday, with economists polled by Reuters anticipating a likely addition of 200,000 jobs in March.
While the dollar index remained relatively unchanged at 104.2, Asian currencies exhibited mixed performance.
Arnob Biswas, head of foreign exchange research at SMC Global Securities, anticipates a modest appreciation bias for the rupee in the upcoming sessions.
Sources: moneycontrol.com
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