The rupee on Friday gained 17 paise to close at 79.23 (provisional) against the US dollar after the Reserve Bank hiked interest rates by 50 basis points.
The domestic currency opened at 79.15 per dollar in the interbank foreign exchange market. It was in the range of 78.94 to 79.29 during the session.
The domestic unit finally closed at 79.23, up 17 paise from its previous close of 79.40.
The Reserve Bank on Friday raised the key interest rate – the third straight hike since May – in an effort to pacify stubborn high inflation and protect the rupee.
The repurchase rate was raised by 50 basis points to raise the interest rate to pre-pandemic levels. The 5.40% repo rate was last seen in August 2019.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.25% at 105.95.
Forex traders said inflow of foreign funds into capital markets and softening crude oil prices gave a boost to the local currency.
Foreign institutional investors remained net buyers in the capital markets on Thursday as they bought shares worth Rs 1,474.77 crore, according to exchange data.
Global oil benchmark Brent crude futures rose 0.20% to $94.31 a barrel.
Reserve Bank of India (RBI) Governor Shaktikanta Das said that the RBI will remain cautious and maintain the stability of the rupee.
“The depreciation of the Indian rupee is more due to the appreciation of the US dollar rather than a weakness in the macroeconomic fundamentals of the Indian economy. Market intervention by the RBI has helped to control volatility and ensure orderly movement of the rupee,” he said. Told. Told.
On the domestic equity market front, the BSE Sensex closed 89.13 points or 0.15% higher at 58,387.93, while the broader NSE Nifty ended 15.50 points or 0.09% higher at 17,397.50.