The rupee ticked higher by 3 paise to 70.46 against the U.S. dollar on Wednesday amid weakness in the greenback and easing crude oil prices.
Forex traders said the rupee’s rise was supported by dollar-selling by exporters and banks.
Meanwhile, the Reserve Bank of India (RBI) on Wednesday left the repo rate unchanged at 6.5% while maintaining the stance of ‘calibrated tightening’ of policy.
At the Interbank Foreign Exchange (Forex) market, the rupee opened lower at 70.70 and lost further ground to hit a low of 70.75.
The local unit, however, pared the initial losses and finally ended the session at 70.46 to the U.S. dollar, up 3 paise.
On Tuesday, the rupee had slipped 3 paise to close at 70.49 due to increased demand for the American currency from importers.
Brent crude, the international benchmark, was trading 0.32% lower at $61.88 per barrel on Wednesday.
Traders said the rupee came under pressure during the session following heavy selling in domestic equities amid foreign fund outflows.
“RBI has maintained status quo on policy rates in line with consensus expectations. To address liquidity issues, the SLR requirement would be gradually brought down to 18% from 19.5% currently.
“Bonds added to the rally and we expect the positive impact of the same to rub off on equities as the global cues turn benign,” said Gaurav Dua, Head of Research, Sharekhan by BNP Paribas.
Benchmark equity indices fell for the second straight day Wednesday. The BSE Sensex tumbled 249.90 points, or 0.69%, to close at 35,884.41. Similarly, the broader NSE Nifty fell 84.55 points, or 0.74%, to end at 10,784.95.
Meanwhile, foreign investors net sold shares worth ₹357.82 crore Wednesday, provisional data showed.
The Financial Benchmark India Private Ltd. (FBIL) set the reference rate for the rupee/dollar at 70.5171 and for rupee/euro at 79.8366. The reference rate for rupee/British pound was fixed at 89.4458 and for rupee/100 Japanese yen at 62.37.
