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Rupee rises to near 6-month high as RBI keeps away; dollar inflows, shift in Fed policy boost sentiment

The rupee gained 43 paise during the day, rising nearly 2 per cent for the week.

By: ENS Economic Bureau | Mumbai | August 29, 2020 1:08:02 am
rupee, indian rupee, rupee vs dollar, indian currency marketThe RBI, which bought $30 billion of forex in the four months up to July to boost the country’s reserves, did not intervene in the market to prevent the rupee appreciation. (Photographer: Dhiraj Singh/Bloomberg)

The rupee on Friday rose to its highest level in close to six months at 73.39 against the US dollar, even as the Reserve Bank of India (RBI) kept away from the currency market amid capital inflows into the stock markets. The rupee gained 43 paise during the day, rising nearly 2 per cent for the week.

The RBI, which bought $30 billion of forex in the four months up to July to boost the country’s reserves, did not intervene in the market to prevent the rupee appreciation.

The US Federal Reserve’s recent policy shift could further boost inflows and boost the rupee’s value, said traders.

Explained

Strengthening risk sentiment

Globally, risk sentiments have strengthened on aggressive stimulus by US Fed and there have been sharp inflows into domestic stocks.

Rs 18K-crore RBI bond auction devolves

The auction of the 10-year government securities (G-secs) carrying a coupon rate of 5.77 per cent on Friday to raise Rs 18,000 crore devolved on primary dealers as the Reserve Bank of India did not get suitable buyers.

Under the competitive category, the RBI accepted only one bid for Rs 4 crore at 6.1448 per cent which was almost on a par with the secondary market rates. Primary dealers will now have to take Rs 17,984 crore worth of bonds in their books. ENS

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