Sponsored by

Rupee slumps 76 paise to close at 69.17 against US dollar amid RBI's monetary policy outcome

Mumbai: Halting its three-day winning run, the rupee plunged 76 paise on Thursday to close at 69.17 against the US dollar after the RBI cut the interest rate but kept its monetary policy stance 'neutral'.

In its first bi-monthly policy review for this financial year, the central bank slashed the policy rate by 0.25 percent for the second time in a row, following which the rupee and sovereign bond prices tumbled.

At the Interbank Foreign Exchange (forex) market, the domestic currency opened lower at 68.56 per dollar and fell further to touch the day's low of 69.21. It finally settled at 69.17, down 76 paise over its previous close.

The rupee had surged by 33 paise to 68.41 against the US dollar on Wednesday.

 Rupee slumps 76 paise to close at 69.17 against US dollar amid RBIs monetary policy outcome

Representational image. Reuters.

"Rupee and sovereign bond tumbled after participants perceived the policy as less dovish than expected...the yield on the benchmark 10-year bond was up 6 basis points to 7.34 percent," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

Rising crude oil prices and strengthening of the greenback against other major currencies overseas also weighed on the domestic unit, forex traders said.

Brent crude futures, the global oil benchmark, climbed 0.39 percent to $69.58 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.09 percent to 97.17.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 226.19 crore Thursday, as per provisional data.

Markets closed in the red on Thursday after the RBI lowered GDP growth forecast for 2019-20 and kept its monetary policy stance 'neutral' amid uncertainty over monsoon.

The 30-share BSE Sensex index settled 192.40 points, or 0.49 percent, lower at 38,684.72. The broader NSE Nifty slipped below the 11,600 mark, ending 45.95 points, or 0.39 percent, down at 11,598.

Meanwhile, Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 68.8446 and for rupee/euro at 77.3878. The reference rate for rupee/British pound was fixed at 90.7675 and for rupee/100 Japanese yen at 61.82.

Your guide to the latest election news, analysis, commentary, live updates and schedule for Lok Sabha Elections 2019 on firstpost.com/elections. Follow us on Twitter and Instagram or like our Facebook page for updates from all 543 constituencies for the upcoming general elections.

Updated Date: Apr 04, 2019 18:50:04 IST