Indian Rupee Experiences Fluctuations Ahead of RBI Policy Review
Mumbai’s Currency Fluctuation
This week, the Indian rupee saw minor fluctuations as traders awaited the Reserve Bank of India’s monetary policy announcement. On Friday, the currency slightly appreciated by two paise, reaching 83.34 against the US dollar, supported by positive equity trends. Finrex Treasury Advisors mentioned the rupee’s expected narrow fluctuations due to balanced inflows and outflows.
Thursday’s Market Movement
However, Thursday saw the rupee settling at 83.36 versus the dollar following substantial share sales by Foreign Institutional Investors (FIIs) amounting to ₹1,564.03 crore.
Monetary Policy Committee Discussions
The Monetary Policy Committee (MPC), under the leadership of Governor Shaktikanta Das, initiated discussions on Wednesday with prevailing expectations of unchanged interest rates. This occurred amidst a minor rise in the Rupee to 103.59 and an increase in crude oil prices to $75.31 per barrel.
Positive Stock Market Response
The stock market reacted positively, with the Sensex surging over 229 points and the NSE Nifty rising around 70 points. Prior to this, the rupee had appreciated by five paise, settling at 83.32 on Wednesday, supported by the RBI’s efforts to maintain critical exchange rate thresholds.
Market Participants’ Monitoring
Market participants are closely monitoring the outcome of the RBI’s review, which significantly impacts both domestic equities and the broader forex market. Meanwhile, Brent crude oil prices dipped to a six-month low of $74.63 per barrel on Thursday, traditionally supporting the rupee’s value against stronger international currencies like the US dollar.
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