Rupee steadied at 82.96 after the RBI decision on monetary policy

Rupee steadied at 82.96 after the RBI  decision on monetary policy

Rupee steadied at 82.96 after the RBI  decision on monetary policy

On Thursday, the RBI revised its forecast for the gross domestic product (GDP) growth rate to 7% for 2024–2025. This is less than the 7.3% growth rate for the current fiscal year.

According to Shaktikanta Das, there are obvious indications that private investment is improving.

The Reserve Bank opted to hold the key policy rate constant for the sixth time on Thursday in order to keep a careful eye on inflation, and as a result, the rupee ended the day on a flat note versus the US dollar at 82.96 (provisional). The downward trend in domestic shares, according to forex traders, affected investor mood.

The rupee began trading at 82.94 against the dollar at the interbank foreign exchange and moved in a tight range to conclude the day at 82.96 against the US dollar. The central bank maintained the repo rate at 6.5 percent for the sixth consecutive day. Against the US dollar, the rupee saw highs of 82.89 and lows of 83 throughout the day. The rupee gained 9 paise versus the dollar on Wednesday, closing at 82.96.

The RBI left the repo rate at 6.5% in line with Street forecasts and preserved the status quo in its monetary policy for the sixth straight session, which kept the Indian rupee stable. The central bank increased its forecast of the GDP for FY24 from 7% to 7.3 %, and also predicted the GDP for FY25 at 7%. Additionally, it predicted that in FY20, CPI (consumer price-based inflation) will decrease by 4.5%.

Nevertheless, the decline in local markets and the strengthening of the US dollar caused the rupee to give up its previous gains. Anuj Chaudhary, a securities analyst at Sharekhan by BNP Paribas, said, "We anticipate the rupee to trade with a slight downside bias on speculation about Report Phrase a correction in the US dollar amid hawkish US Fed talks as well as geopolitical tensions," The peace plan from Hamas was rejected by the Israeli prime minister, perhaps leading to a rise in crude oil prices. Positive international markets, however, may keep the currency strong at lower levels. Weekly US jobless claims statistics and remarks from different Fed members might serve as indicators for traders.

The projected trading range for the USD-INR spot price is Rs 82.70 to Rs 83.30. In order to ensure that the gains are not lost, RBI Governor Shaktikanta Das stated the Monetary Policy Committee (MPC) would monitor food inflation while announcing the bi-monthly monetary policy on Thursday. On Thursday, the RBI revised its forecast for the gross domestic product (GDP) growth rate to 7% for 2024–2025. This is less than the 7.3% growth rate for the current fiscal year. According to Das, there is still growth in rural demand, robust urban consumption, and a strengthening investment cycle as a result of higher capital expenditures.

He said that private investment is showing indications of recovery. The dollar index, which measures the strength of the US dollar relative to a basket of six other currencies, was up 0.03 percent at 104.08. The benchmark for global oil, Brent crude futures, increased 0.16 percent to US$79.34 a barrel. The 30-share BSE Sensex finished at 71,428.43 on the domestic equities market, down 723.57 points, or 1%. The whole NSE Nifty dropped to 21,717.95, a decrease of 212.55 points, or 0.97 percent. According to exchange statistics, foreign institutional investors (FIIs) sold shares worth Rs 1,691.02 crore on Wednesday, making them net sellers in the capital market.