Rupee up 8 paise to close at 76.40 against US dollar as RBI hikes interest rate

The forex market was closed on Tuesday on account of Id-Ul-Fitr

AgenciesUpdated: Wednesday, May 04, 2022, 04:32 PM IST
article-image
At the interbank forex market, the domestic unit opened at 76.46 against the US dollar. It moved in the range of 76.17 to 76.58 during the session. / Representative image |

The rupee appreciated 8 paise to settle at 76.40 (provisional) against the US dollar on Wednesday following RBI's surprise rate hike ahead of the US Federal Reserve's policy decision.

At the interbank forex market, the domestic unit opened at 76.46 against the US dollar. It moved in the range of 76.17 to 76.58 during the session.

The rupee finally closed at 76.40, registering a rise of 8 paise over its previous close.

On Monday, the rupee had settled at 76.48 against the US dollar.

The forex market was closed on Tuesday on account of Id-Ul-Fitr.

The RBI on Wednesday after an unscheduled MPC meeting hiked the benchmark lending rate by 40 basis points (bps) to 4.40 per cent to contain inflation that has remained stubbornly above the target of 6 per cent for the last three months.

The Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das also raised the level of deposits banks are required to maintain as cash reserve by 50 bps to 4.5 per cent to suck out Rs 87,000 crore of liquidity from the banking system.

The CRR hike will be effective from May 21.

The governor said the interest rate hike is aimed at strengthening, consolidating medium-term economic growth prospects. Overall commentary of the RBI governor was hawkish and that restricted losses for the rupee, said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

''But ahead of the important Fed policy statement we suggest that one must be cautious. Volatility for the USD-INR will continue to remain elevated and we expect it to quote in the range of 76.05 and 76.80,'' Somaiya said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.01 per cent lower at 103.45.

On the domestic equity market front, the 30-share BSE Sensex ended 1,306.96 points or 2.29 per cent lower at 55,669.03, while the broader NSE Nifty plunged 391.50 points or 2.29 per cent to 16,677.60.

Brent crude futures, the global oil benchmark, inched up 3.43 per cent to $108.57 per barrel.

Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 1,853.46 crore, as per stock exchange data.

(With inputs from PTI)

(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

Tesla won't manufacture in India unless allowed to sell, service cars: Elon Musk

Tesla won't manufacture in India unless allowed to sell, service cars: Elon Musk

India records 2,685 fresh COVID-19 cases, 33 deaths

India records 2,685 fresh COVID-19 cases, 33 deaths

French Open: Rafael Nadal vs Uncle Toni: Rafa to meet Felix Auger-Aliassime in Paris

French Open: Rafael Nadal vs Uncle Toni: Rafa to meet Felix Auger-Aliassime in Paris

Mumbai: Ola driver arrested for molesting 15-year-old girl in Goregaon

Mumbai: Ola driver arrested for molesting 15-year-old girl in Goregaon

Union minister Narayan Rane undergoes angioplasty in city hospital

Union minister Narayan Rane undergoes angioplasty in city hospital