Rupee Recovers 15ps To 87.44/$

Mumbai: The rupee recovered 15paise from its all-time low closing level to 87.44 against the US dollar on Friday after the Reserve Bank of India reduced repo rate by 25 basis points in line with street expectations. The Monetary Policy Committee (MPC), headed by RBI Governor Sanjay Malhotra, slashed the repo rate by 25 basis points to 6.25 per cent. This was the first reduction since May 2020 and the first revision after two-and-a-half years. At the interbank foreign exchange, the rupee opened at 87.57, touched an intra-day high of 87.33 and a low of 87.57 against the greenback during the session. The local unit finally settled for the day at 87.44 against the US dollar, registering a rise of 15 paise over its previous close.

On Thursday, the rupee plunged 16paise to close at an all-time low of 87.59 against the US dollar. “We expect the rupee to trade with a negative bias amid weak domestic markets and dollar demand from importers. Risk aversion in global markets amid ongoing uncertainty over US trade tariffs may also weigh on the rupee,” said Anuj Choudhary -- Research Analyst at Mirae Asset Sharekhan. The RBI cut repo rate by 25 bps to 6.25 per cent from 6.5 per cent, was in line with street expectations, Choudhary said, adding,

“Thus, markets did not react too sharply.” Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04 per cent lower at 107.64. Reserve Bank Governor Sanjay Malhotra on Friday said the exchange rate policy has remained consistent over the years and the central bank does not target any “specific level or band” of the rupee, which slipped to an all-time low of 87.59 against the US dollar on Thursday. The governor further noted that the exchange rate policy has remained consistent over the years and the central bank does not target any “specific level or band” of the rupee.