Thursday, January 15, 2015

Indian rupee gains past 62/dollar as RBI cuts repo rate

The Indian rupee gained past 62 a dollar in early trade on Thursday as the Reserve Bank of India (RBI) slashed repo rate by 25 basis points to 7.75 percent.

The currency appreciated by 30 paise to trade at 61.88 per dollar against previous day's closing value of 62.18 a dollar.

RBI kept cash reserve ratio (the amount of funds that every bank has to keep with the RBI) unchanged. Governor Raghuram Rajan says inflation may be below 6 percent by January 2016.

The dollar nurses losses, having retreated across the board after a surprisingly big fall in US retail sales pulled US yields sharply lower.

Also Read - RBI cuts repo rate by 25 basis points ahead of Feb 3 policy

Mohan Shenoi of Kotak Mahindra Bank said, "Global markets are swinging between risk-on and risk-off based on US data and growth/deflation scare. The dollar is showing mixed trends by holding stable against Euro while mildly losing ground to Yen and GBP. The USD-INR is expected to trade in a range of 62-62.30/dollar today."

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