Mumbai: The rupee strengthened by 9 paise to 77.69 against the US dollar in opening trade on Wednesday, ahead of the Reserve Bank of India’s monetary policy decision. A weak trend in domestic equities, surging crude oil prices and unabated foreign fund outflows capped the appreciation bias of the rupee, forex dealers said.
The RBI’s Monetary Policy Committee (MPC) is slated to announce its policy decision later in the day. At the interbank foreign exchange, the rupee opened strong at 77.70 against the US dollar, then gained further ground to quote 77.69, registering a rise of 9 paise over the last close.
In the previous session, the rupee had closed at a record 77.78 against the US dollar. On the domestic equity market front, the 30-share Sensex was trading 63.2 points or 0.11 per cent lower at 55,044.14, while the broader NSE Nifty slipped 23.65 points or 0.14 per cent to 16,392.70. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.24 per cent to 102.56.
Global oil benchmark Brent crude futures advanced 0.07 per cent to USD 120.66 per barrel. Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,293.98 crore, as per exchange data. The RBI is likely to raise the benchmark lending rate by 25-50 basis points on Wednesday as inflation continues to remain above its comfort level, say experts.
Last month, RBI raised the repo rate or short-term lending rate by 40 basis points in an off-cycle monetary policy review to check spiralling inflation. The decision of the RBI Governor Shaktikanta Das-headed MPC, which started its deliberations on Monday, is scheduled to be announced at 10 am on Wednesday.
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