The Indian currency witnessed a rise on Friday after the results of the Monetary Policy Committee meeting of the Reserve Bank of India (RBI). The rupee closed at 94.93 with a gain of 81 paise against the US dollar. Market sentiment has improved due to the steps taken by the central bank to increase the inflow of foreign capital and strengthen forex liquidity. Forex traders say that this decision of the RBI Governor has increased the confidence of investors that the country’s foreign exchange reserves are completely sufficient to deal with external economic shocks. No change in interest rates for the second consecutive time. RBI did not make any change in its interest rates (repo rate) as expected on Friday. This is the second consecutive time that rates have been kept stable. Announcing the second bi-monthly monetary policy of the current financial year, RBI Governor Sanjay Malhotra said that the MPC has unanimously decided to maintain the short-term lending rate i.e. repo rate at 5.25%. Along with this, the policy stance has been kept ‘neutral’. The central bank has taken this decision keeping in mind the rising prices of crude oil and problems in the supply chain due to the West Asia crisis. Rupee reached a high of ₹ 94.89 in day-long fluctuations. In the Interbank Foreign Exchange Market (Foreign Exchange Market) on Friday, the rupee started with a strong price of 95.72. During trading it touched an intraday high of 94.89. Finally it closed at 94.93 registering an increase of 81 paise over the previous closing price. Earlier on Thursday, the rupee had increased by just 2 paise and closed at 95.74 against the dollar. The biggest effort to raise dollars since 2013. Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, said, “RBI has increased the inflation estimate for the financial year 2027 by 50 basis points to 5.1%, but despite this, the repo rate has been maintained with a neutral stance at 5.25%. It is clear that interest rates will be used to stop inflation. While capital account will be taken to keep the rupee strong. He further said that the steps taken by the government and RBI together are the most comprehensive efforts to raise dollars since 2013. These include facilities like inclusion of new 15, 30 and 40 year government bonds (G-Secs) in the fully accessible route, removal of FPI concentration limits and PSU ECB swap window. Along with this, the removal of tax on foreign investment in government bonds by the Central Government will increase the attraction of global funds towards India rapidly. The level may reach ₹ 94 in the coming days. According to experts, if the prices of crude oil in the international market remain below 100 dollars per barrel, then these steps will further strengthen the rupee. In the coming time, the rupee may improve to the level of 94 to 94.5, while the upper level of dollar-rupee is now limited to around 96. However, strength beyond ₹94 will depend on how much dollars come into the country through the new regulations. Foreign exchange reserves are enough for 11 months of imports. RBI Governor Sanjay Malhotra expressed confidence in the economic condition of the country and said that India’s foreign exchange reserves are at a strong level of $ 682.3 billion. This stock is completely sufficient to meet the import needs of the country for about 11 months. On the other hand, the dollar index, which shows the strength of the dollar against six major currencies of the world, was trading down by 0.19% at 99.22. At the same time, Brent crude futures declined by 0.29% to $ 94.75 per barrel. GDP growth estimates reduced, inflation concerns increased. While on one hand RBI has made arrangements to manage the rupee, on the other hand it has also changed some estimates on the economy front. The central bank has reduced the GDP growth rate estimate for the current financial year from 6.9% to 6.6%. Along with this, the estimate of Consumer Price Index (CPI) based retail inflation for the financial year 2027 has been increased from 4.6% to 5.1%. Meanwhile, there was a slight decline in the domestic stock market. Sensex fell 116.67 points to close at 74,243.34 and Nifty slipped 49.85 points to close at 23,366.70. According to exchange data, foreign institutional investors (FIIs) had sold shares worth ₹4,447.06 crore on Thursday.
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Rupee strengthened by 81 paise against dollar: closed at ₹94.93 after RBI policy; Repo rate remains at 5.25%
