Rupee Vs Dollar: The rupee is down 5% against the dollar so far this year
The rupee gave up early gains to close flat at 74.93 against the US dollar on Thursday, after the Reserve Bank of India (RBI) left the key policy rates unchanged following a three-day review but vowed to do "whatever is necessary" to revive an economy battered by the COVID-19 pandemic. The rupee surrendered all of its intraday gains in the second half of the session following the central bank's announcement, having risen 0.21 per cent - or 16 paise - to 74.77 against the greenback at the strongest level recorded earlier.
The rupee had begun the day stronger at 74.81 against the US currency on Thursday, ahead of the release of a scheduled bi-monthly statement by the central bank, compared to its previous close of 74.93.
RBI Governor Shaktikanta Das said there is space for monetary policy easing, but the central bank will ensure inflation stays within its target range, leaving the repo rate at 4.0 per cent and the reverse repo rate at 3.35 per cent.
Repo rate is the interest rate at which the RBI lends funds to commercial banks, whereas reverse repo rate is one at which the RBI borrows funds from them.
To ease debt strains on companies and lenders, the Reserve Bank of India allowed restructuring of corporate and personal loans by banks, a move that was widely awaited by the industry.
Domestic stock markets closed higher after the RBI action. The S&P BSE Sensex index closed 0.96 per cent higher at 38,025.45, whereas the broader NSE Nifty 50 benchmark settled at 11,200.15, up 0.89 per cent.
Meanwhile, the dollar index - which gauges the greenback against six currencies - was last seen trading 0.04 per cent higher, having earlier moved up as much as 0.11 per cent.
Crude oil prices slipped off five-month highs as bearish sentiment about fuel demand undermined support from a weak dollar and falling US crude inventories. Brent crude futures - the global benchmark for crude oil - were last seen trading 0.51 per cent lower at $44.94 per barrel.
At the current level, the rupee has recovered 2.57 per cent against the US dollar since an all-time low of 76.91 registered in April, but is still down 5 per cent so far this year.
