On Monday the currency market was shut on account of Ramzan Id.
Indian rupee is holding on the early gains and trading higher, amid buying seen in the domestic equity market.
It opened higher by 27 paise at 75.68 per dollar versus Friday's close of 75.95.
On Monday the currency market was shut on account of Ramzan Id.
Also Read - RBI may continue to step in from time to time to keep rupee volatility in check
"In spite of the proactive measures taken by the RBI to boost liquidity in the markets, rupee has still navigated on the downwards trajectory. The central bank has slashed the interest rates by 40 bsp, has provided for term loan moratorium extension and expanded the lending limits to the corporates to soften the economic pain inflicted by the coronavirus crisis due to acute growth moderation risks," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.
"These measures shall provide the much needed support to the economy, but the street was expecting much more. There is lot of uncertainty as to how long it will take the demand to recover and the depressed economic activity to revive. The global cues too have worked to suppress the rupee further with sharp rise in the greenback amid the souring US-China relations and fall in other emerging market currencies."
"In the current scenario, the path for the local currency looks bumpy, yet the level of 76.60 shall provide a strong cushion to the Indian rupee," she added.
The dollar inched lower on Tuesday as growing optimism about a global recovery from the COVID-19 pandemic supported riskier currencies, though concerns about Sino-U.S. tensions held further moves in check.
Oil prices rose on Tuesday on clear signs that producers are sticking to commitments to cut crude supply as more cars get back on the road with coronavirus lockdowns easing around the world.
"Last week, the trend in USD/INR spot was very lacklustre and in a very tight range. As more economies reopening up and there is progress over Covid-19 vaccine, there is some optimism amongst the traders but year-long US-China trade tiff has been keeping a check on appreciation in the rupee. Also, RBI's rate cut move couldn't cheer the forex traders. The 40bps repo rate cut move was in line with market expectations but it didn't provide full-fledged restructuring of loans also didn't give the FY21 GDP figure," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
"The RBI will have to take sector-specific measures to bring in this transmission. Going ahead, the investors focus will be on KKR and Reliance Industries' Jio related inflows of nearly $1 bln and FII participation in Reliance Industries Limited (RIL) rights issue. Technically, 76 has been acting as a psychological resistance in USD/INR spot, a break of which can take prices towards 76.20-76.50. Otherwise, we expect the spot to trade in between 75-76 zone," he added.
