The Indian rupee rebounded by 48 paise to settle at 76.39 (provisional) against the US dollar on Friday, buoyed by RBI measures to prop up the economy reeling under the COVID-19 impact.
The domestic currency was also helped by positive cues coming through a rebound in domestic equities.
Forex traders said these measures announced by Reserve Bank Governor Shaktikanta Das would provide the much needed liquidity and ease the financial stress caused by the pandemic.
At the interbank foreign exchange, the rupee opened at 76.59, and then gained further ground and touched a high of 76.35 against the US dollar.
The domestic unit finally settled for the day at 76.39 against the US dollar, registering a rise of 48 paise over its previous close.
On Thursday, the 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%.
This will encourage banks to lend to the productive sectors of the economy.
With regard to other measures, Das said the 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 ₹50,000 crore for financial institutions like Nabard, National Housing Bank and Sidbi.
“Also, there is a clamour for fiscal support via another round of a stimulus package. This could provide some cushion to depreciating rupee,” said Rahul Gupta, Head of Research – Currency, Emkay Global Financial Services.
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