Mumbai: The Indian rupee held on to gains in afternoon trade on Friday comforted by gains in the euro and domestic equities after announcement of a sweeping Greece bailout plan.
But underlying mood remained cautious before the Reserve Bank of India’s policy review slated on Tuesday, where the central bank is widely expected to announce a 25 basis point rise in key lending rate. See for a poll on the likely rate action.
Dollar demand from domestic oil firms for import payments also checked the rupee’s rise, dealers said.
Oil is India’s biggest import item and domestic oil firms are the largest purchasers of the dollar in the local forex market.
At 1:50pm, the partially convertible rupee , was 44.4025/4050 per dollar, stronger than its 44.515/525 close on Thursday, but down from the day’s high of 44.3450.
The euro was at $1.4393 versus $1.4182 when the domestic forex market closed on Thursday, while the index of the dollar against six major currencies was at 74.052 points against 74.914.
On Thursday, European leaders agreed on a bailout package that would make it easier for Greece to reduce debt more sustainably by easing terms of loans and by making Greek bond investors shoulder some of the burden. and
Indian shares climbed over 1.5% on Friday led by financials comforted by the Greek rescue package.