Rupee rises 37 paise to close at 81.36 against US dollar

Mumbai: The rupee extended its initial gains and settled 37 paise higher at 81.36 against US dollar on Friday, after the Reserve Bank of India raised the benchmark lending rate by 50 basis points. At the interbank forex market, the local unit opened at 81.60 against the greenback. It witnessed an intra-day high of 81.17 and a low of 81.69 during the session. It finally ended at 81.36, up 37 paise from its previous close. On Thursday, the rupee recovered from record lows to settle 20 paise higher at 81.73 against the dollar. The Reserve Bank of India (RBI) on Friday raised the benchmark lending rate by 50 basis points, the fourth straight increase since May, as it extended its battle to tame stubbornly high inflation. The Monetary Policy Committee (MPC), comprising three members from the RBI and three external experts, raised the key lending rate or the repo rate to 5.90 per cent – the highest since April 2019 – with five out of the six members voting in favour of the hike. “Rupee strengthened sharply in today’s session after the RBI decided to raise rates by 50 bps,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services. The MPC is focused on calibrated withdrawal of accommodation. Inflation trajectory remains clouded with uncertainty and delayed monsoon withdrawal impacting vegetable prices. The Indian economy remains resilient despite global headwinds. “India’s central bank is encouraging state-run refiners to reduce dollar buying in the spot market to contain a sharp fall in the rupee. Dollar retraced from higher levels ahead of core PCE Index number that will be released from the US,” Somaiya said, adding that “we expect the USD-INR (Spot) to quote in the range of 81.20 and 82.05.” Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.42 per cent to 111.78. Brent crude futures, the global oil benchmark, rose 0.84 per cent to USD 89.23 per barrel. In the domestic equity market, the 30-share BSE Sensex jumped 1,016.96 points or 1.80 per cent to close at 57,426.92 points and the broader NSE Nifty rose 276.25 points or 1.64 per cent to 17,094.35 points. Foreign Institutional Investors (FIIs) were net sellers in the capital markets as they offloaded shares worth Rs 3,599.42 crore on Thursday, according to exchange data. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.