Stories
Rupee opens 3 paise higher against dollar ahead of RBI rate decision
- •The rupee opened marginally higher at 96.45 against the US dollar on October 7 ahead of the Reserve Bank of India monetary policy review.
- •The central bank is widely expected by market experts to hike the repo rate by 25 basis points to 5.5 percent.
- •Brent crude rebounded sharply above the 100 dollar a barrel mark, trading at around 101.38 dollars.
- •The RBI has intervened in the market recently to prevent a sharp depreciation in the currency amid high oil and FPI demand.
- •Liquidity management, inflation, and growth projections remain key focus areas for the market during the policy review.
Key Questions Answered
The Reserve Bank of India's monetary policy committee is widely expected to raise the repo rate by 25 basis points to 5.5 percent during its bi-monthly review. A poll of 19 market experts indicated that 15 respondents favor this 25 basis point hike, which would mark the first interest rate increase since February 2023, while four expect a status quo.
The rupee opened marginally higher at 96.45 against the US dollar on October 7, and was trading at 96.40 after closing the previous session at 96.43. Over the preceding month, the currency has lost more than 2 percent due to ongoing oil demand and FPI demand for dollars.
Brent crude rebounded sharply overnight, rising back above the $100-a-barrel mark to trade at around $101.38, an increase of about 3.7 percent. This recovery followed a dip below $100 on October 6, which had been driven by improving West Asian exports and a planned G7 emergency stockpile release.
