Rupee Gains Marginally To 72.93 Against Dollar Amid Monetary Policy Review, Rep Rate Unchanged

Rupee Vs Dollar: The rupee ended at 72.93 against the American currency

The rupee gained marginally by three paise against the US dollar on Friday, February 5, to settle at 72.93 (provisional) after the Reserve Bank of India kept the policy rate unchanged but maintained its accommodative stance during its bi-weekly Monetary Policy Committee meeting today. At the interbank foreign exchange market, the domestic unit opened at 72.98 against the dollar and registered an intra-day high of 72.80. It witnessed a low of 72.99. In an early trade session, the local unit opened on a flat note to 72.95 against the dollar. The rupee ended at 72.93 against the American currency, registering a rise of three paise from its previous close. On Thursday, February 4, the rupee had ended at 72.96 against the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.13 per cent to 91.41. Throughout the week, the rupee witnessed both steady and volatile sessions as it settled on a flat note against the greenback for two straight trading sessions. During the week, it also closed at marginal gains, even as domestic equities scaled fresh highs. 

“Indian Rupee gained strength amid surge in domestic markets and as Reserve Bank of India kept repo rate unchanged at 4.0 per cent and maintained its accommodative stance. However, sharp upside was prevented on strong dollar and surge in crude oil prices,” said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

The six-member Monetary Policy Committee (MPC) voted to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target, according to Governor Shaktikanta Das.

On the domestic equity market front, the BSE Sensex ended 117.34 points or 0.23 per cent higher at 50,731.63, while the broader NSE Nifty advanced 28.60 points or 0.19 per cent to 14,924.25. ”Indian benchmark equity indices managed to end with small gains on Feb 05, ending higher for the fifth straight session after hitting record highs in early trade. The outcome of the RBI’s MPC had little effect on the markets”, said Mr. Deepak Jasani, Head of Retail Research, HDFC Securities.

”Nifty gained handsomely in the week gone by aided by the announcements in the Union Budget. It has turned back from 15,000 after breaching it during the day. However, it may make another attempt to touch/breach that number in the coming week. Advance decline ratio again ended in the negative reflecting some profit-taking in midcaps (as the attention has shifted to large-caps lately),” he added.

According to exchange data, the foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,936.74 crore on February 4.  Brent crude futures, the global oil benchmark, rose 1.24 per cent to $ 59.57 per barrel.