Rupee rises 45 paise to 76.42 against US dollar post RBI presser

Mumbai: The Indian rupee appreciated by 45 paise to 76.42 against the US dollar in intra-day trade on Friday after Reserve Bank of India Governor Shaktikanta Das announced measures to ensure adequate liquidity in the system to ease the financial stress caused by the Covid-19 pandemic.

Forex traders said positive domestic equities and weakening of the American currency in the overseas also supported the rupee.

At the interbank foreign exchange, the rupee opened at 76.59, and then gained further ground and touched a high of 76.42 against the US dollar, registering a rise of 45 paise over its previous close.

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On Thursday, rupee had settled at an all-time low of 76.87 against the US dollar.

The central bank reduced the reverse repo rate – the rate at which banks park their fund with the central bank – by 25 basis points to 3.75 per cent.

This will encourage banks to lend to the productive sectors of the economy.

With regard to other measures, Das said RBI will begin with giving an additional Rs 50,000 crore through targeted long-term repo operation (TLTRO) to be undertaken in tranches.

Besides, he announced a re-financing window of Rs 50,000 crore for financial institutions like Nabard, National Housing Bank and Sidbi.

“Combination of measures to boost liquidity, improve monetary transmission and relax repayment schedules is the need of the hour in which RBI has been proactive and repeatedly insisting that they would do whatever it takes.

“Ofcourse this provides much needed liquidity and positive message for NBFC especially and a much elaborated stimulus package is awaited,” said Abhishek Goenka, Founder & CEO, IFA Global.

The measures undertaken by the RBI boosted investor sentiment. However, there are concerns over the impact of coronavirus outbreak on the domestic as well as global economy.

The number of cases around the world linked to the new coronavirus has crossed over 21 lakh. In India, over 13,000 coronavirus cases have been reported so far.

Meanwhile, domestic bourses were trading on a positive note on Friday with benchmark indices Sensex trading 595.79 points higher at 31,198.40 and Nifty up by 169.45 points at 9,162.25.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold equity shares worth Rs 2,920.36 crore on Thursday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, rose 2.05 per cent to USD 28.39 per barrel.

Meanwhile, the dollar index, which gauges the greenback’s strength against the basket of six currencies was trading 0.24 per cent lower at 99.78.

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