Rupee pares initial gains, settles 27 paise higher at 74.89; RBI measures boost investor sentiment

The rupee pared its initial gains to settle 27 paise higher at 74.89 (provisional) against the US dollar on Friday after the RBI announced various measures to stimulate growth amid coronavirus-induced lockdown in the country

Press Trust of India March 27, 2020 19:12:38 IST
Rupee pares initial gains, settles 27 paise higher at 74.89; RBI measures boost investor sentiment

Mumbai: The rupee pared its initial gains to settle 27 paise higher at 74.89 (provisional) against the US dollar on Friday after the RBI announced various measures to stimulate growth amid coronavirus-induced lockdown in the country.

Forex traders said stimulus measures announced by the RBI and FPIs turning net buyers in capital markets boosted investor sentiment.

However, there are still concerns over the impact of coronavirus outbreak on the domestic as well as the global economy.

The rupee opened on a positive note at 74.60 and touched a high of 74.35 in late morning trade. Later it erased the gains to end 27 paise higher at 74.89 against the American currency.

Rupee pares initial gains settles 27 paise higher at 7489 RBI measures boost investor sentiment

Representational image. PTI.

During the day, the domestic unit touched a high of 74.35 and a low of 75.40.

The Reserve Bank of India (RBI) on Friday cut benchmark interest rate by 75 basis points to 4.4 percent. The central bank also reduced the cash reserve ratio (CRR) of all banks by 100 basis points to 3 percent with effect from 28 March for 1 year.

RBI Governor Shaktikanta Das said all instruments - conventional and unconventional - are on the table to support financial stability and revive growth and noted that Rs 3.74 lakh crore liquidity will be injected into the system through various measures announced on Friday.

"These measures could elevate sentiments temporarily but the main impact will be visible post the lifting of lockdown. Thus, we see USD/INR spot to trade in between 74.30 and 76.30," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

On a weekly basis, the domestic currency has appreciated 31 paise.

"We expect that volatility for the currency would continue to remain high as cases of Coronavirus reported on the domestic front continue to increase. We expect the rupee (Spot) to quote in the range of 74.50 and 75.50," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

The number of deaths around the world linked to the new coronavirus has crossed over 24,000. In India, more than 700 coronavirus cases have been reported so far.

Meanwhile, the dollar index, which gauges the greenback''s strength against a basket of six currencies, rose 0.10 percent to 99.45.

The 10-year government bond yield was at 6.14 percent.

Global crude oil benchmark Brent fell 2.09 percent to $25.79 per barrel.

On the domestic equity market front, the 30-share BSE barometer gave up all the gains to end 131.18 points or 0.44 percent lower at 29,815.59. The broad-based NSE Nifty closed 18.80 points, or 0.22 percent, higher at 8,660.25.

Foreign institutional investors (FIIs) turned net buyers in the capital market, as they bought securities worth Rs 355 crore on Friday, according to provisional exchange data.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.2392 and for rupee/euro at 82.0483. The reference rate for rupee/British pound was fixed at 89.0185 and for rupee/100 Japanese yen at 67.98.

Updated Date:

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