Rupee Stays Range-Bound as Market Awaits RBI's Next Move

Mumbai, June 6 – On Friday morning, the Indian rupee traded in a small range as investors eagerly awaited the Reserve Bank of India’s (RBI) announcement on monetary policy, which was due later in the day.

The rupee opened at 85.91 per dollar, which was 12 paisa lower than Thursday. However, it swiftly made up for early losses and reached an intraday high of 85.77. The change showed how volatile the market was as traders guessed what the RBI would do next.

The rupee broke a two-day losing streak on Thursday, closing 8 paisa higher at 85.79 against the US dollar.

A close attention is being paid to RBI’s policy statement as it is assumed that interest rates are going to be lowered by 25 basis points. This is happening at a time when inflation is stable and the difference in interest rates between India and large nations, especially the US, is getting smaller. Investors are confident that the central bank’s choice would help them understand liquidity measures and keep the currency stable.

The dollar index went up 0.03% to 98.77, which means the greenback is getting a little stronger. Brent oil futures, on the other hand, dropped 0.26% to USD 65.17 a barrel, which helped India pay for its imports a little bit.

The BSE Sensex fell 227.18 points to 81,214.86, and the NSE Nifty fell 65.30 points to 24,685.60. This was a bad start for the local stock market. Foreign institutional investors (FIIs) kept selling, and on Thursday they sold stocks worth 208.47 crore.

The rupee is projected to trade between 85.50 and 86.25 against the US dollar in the immediate term while the market waits for the RBI’s policy direction.

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