Rupee up 5 paise at 61.95 against the dollar
Mumbai – The rupee was trading marginally strong by 5 paise at 61.95 against the dollar at 4.15 p.m. local time on fresh dollar selling by banks and exporters and on the back of firm domestic equity market.
The rupee sentiment was buoyed after RBI Governor Raghuram Rajan surprised the markets by leaving the repo rate and CRR unchanged at 7.75 per cent and 4 per cent, respectively.
The rupee gained 10 paise to 61.90 per dollar in the opening trade against the previous close of 62 on the back of a modest recovery in the domestic equity market.
On Tuesday, the domestic unit had surpassed the 62 level against the US dollar ahead of the important RBI policy meeting which is scheduled today.
The rupee also declined on renewed dollar demand from importers and banks amid bearish local equities. Its fall was restricted, underpinned by foreign fund inflows and a weak dollar overseas.
Abhishek Goenka, Founder and Chief Executive Officer of India Forex Advisors, said if the Fed decides to taper its current QE by a small amount, it will result in strengthening of the US dollar and weakening of other Asian currencies.
However, if they assert that they want to see some more economic data before tapering QE, then it will result in a sell-off of the US dollar and strengthening of other Asian currencies.