Rupee Strengthens Against US Dollar After RBI Keeps Repo Rate Unchanged

The Indian rupee strengthened against the US dollar on Friday after the RBI’s monetary policy committee kept the benchmark repo rate unchanged for the seventh time in a row.

The local currency strengthened three paise to trade at Rs 83.42 against the greenback. It had closed at 83.45 on Thursday, according to the Bloomberg data.

Indian rupee remained largely rangebound and it is most stable among major currencies, RBI Governor Shaktikanta Das said during a press conference after MPC decision.

“Compared to previous three years, rupee exhibited lowest volatility in FY24”, Das added.

The rupee is anticipated to face ongoing pressure, though not expected to dip below the 83.50 mark, thanks to the robust reserves held by the Reserve Bank of India which are currently near their all-time highs, according to Amit Pabari, managing director at CR Forex Advisors.

“Consequently, short-term forecasts indicate a potential for the rupee to range between approximately 83 and 82.80 against the dollar, while long-term expectations suggest it may stabilise around 82.50 to 82.20 levels,” Pabari said.

“Rising US jobless claims and trade deficit, alongside falling Treasury yields, weigh on the dollar but on the other hand, Middle East geopolitical (situation) pushes Brent crude prices higher,” Kunal Sodhani, vice president of Shinhan Bank, said. “For USDINR, 83.35 acts as a support, while 83.60 a resistance.”