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Rupee surges 93 paise to close at 95.78 against US dollar following RBI measures
- •The rupee appreciated 93 paise to close at 95.78 against the US dollar, marking its steepest single-day gain in over six months.
- •The Reserve Bank of India introduced crucial measures over the weekend to bolster the domestic currency and ease spot-market dollar demand.
- •The RBI tightened forex derivatives rules and asked banks to create a 20 per cent reserve for dollar purchases exceeding USD 2 million.
- •Experts note that sustained recovery for the rupee will depend heavily on crude oil prices, capital flows, and global market conditions.
- •Meanwhile, retail inflation rose sharply to 5.54 per cent in September, remaining just within the central bank's tolerance band.
Key Questions Answered
The rupee appreciated 93 paise to close at 95.78 against the US dollar after the Reserve Bank of India stepped in over the weekend with measures aimed at bolstering the domestic currency. These interventions included tightening forex derivatives rules and setting up a dedicated dollar window for oil marketing companies.
The RBI tightened rules governing forex derivatives trades to curtail speculative bets against the rupee. It required banks to create a 20 percent reserve for dollar purchases exceeding USD 2 million and instructed authorized dealers not to permit users to rebook cancelled foreign exchange derivative contracts involving the INR.
On the domestic equity front, the Sensex tumbled 547.65 points to settle at 71,924.68, and the Nifty dropped 157.10 points to 22,363.35, with foreign institutional investors offloading Rs 1,708.48 crore in equities. Meanwhile, retail inflation rose sharply to 5.54 percent in September due to high onion and food prices, remaining just within the RBI's tolerance band.
