Rupee bounces 24 paise while RBI maintains an accommodating posture
Mumbai, December 5 () The Indian rupee rose sharply in the last hour of trade to settle 24 higher rises to 71.29 per US dollar on Thursday after the RBI promised to continue with an accommodative stance in its monetary policy.
However, the central bank decided to keep the key interest rate unchanged in its fifth bi-monthly monetary policy for this current prosecutor, a measure that greatly surprised investors who expected a cut of at least 25 basis points in the policy rate .
The Indian unit negotiated on a flat note for a better part of the session, but fell briefly after the monetary policy announcement promoted by RBI. It recovered rapidly mainly in the last hour of trading to close at 71.29, an increase of 24 countries over its previous close.
The rise of the rupee was also backed by a weaker dollar against key global currencies.
The dollar index, which measures the strength of the dollar against a basket of six currencies, fell 0.16 percent to 97.49.
The Indian rupee increases in line with other Asian peers. The rupee rose more after the Reserve Bank of India left the policy rate at 5.15, the first pause after five consecutive rate cuts, amid rising inflation expectations, HDFC Securities said.
The yield on 10-year government bonds was 6.60 percent, more than 2 percent.
The sovereign bonds of India declined more in more than two months, the 10-year bond yield bonds rose 13 basis points to 6.60 percent, after the central bank keeps the policy rate unchanged ... The MPC He also decided to continue with the accommodative stance while reviving growth is necessary, he added.
On the equity front, the EEB Sensex indicator was set down 70.70 points or 0.17 percent at 40,779.59. The index was balanced between profit and loss after the central bank kept the rates unchanged.
The NSE Nifty closed the day with a loss of 24.80 points or 0.21 percent at 12,018.40.
The crude oil benchmark, Brent Futures, rose 0.65 percent to USD 63.41 per barrel.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.78 and for the rupee/euro at 79.50. The reference rate for the rupee/British pound was set at 93.2719 and for the rupee/100 Japanese yen at 66.11.
After five consecutive cuts in interest rates this year, the six-member Monetary Policy Committee (MPC), headed by RBI governor Shaktikanta Das, voted unanimously to keep the key repo rate at 5.15 percent and the reverse repo rate at 4.90 percent.
Bankers and economists widely expected the central bank to reduce rates for the sixth time to support a decelerating economy, whose growth rate fell to a minimum of six years from 4.5 percent in the September quarter from 7 percent the previous year . The Indian rupee of MKJ opened on Thursday with a constant note of 71.53 against the US dollar in the first operations, before the monetary policy decision of the Reserve Bank of India. Foreign institutional investors (FII) remained net sellers in the capital market, taking Rs 781.06 rupees on Wednesday, according to provisional exchange data. MKJ MKJ