CRR hike perks up rupee

CRR hike perks up rupee

Mumbai: The rupee perked up on 30 October after the central bank raised the cash reserve ratio, with traders expecting further overseas capital flows into the fast rising stock market.

At 1:30pm, the partially convertible rupee was at 39.365/370 per dollar, rising from the previous finish of 39.42/43, and heading back towards the 9-year high of 39.27 hit early this month.

The RBI raised the proportion of cash banks have to keep with it on deposit by 50 basis points to 7.5% to mop up excess funds, but, as expected, kept its key lending rate unchanged.

Before the credit policy was announced, the rupee was trading at nearly the same value as yesterday’s close.

Tomorrow the US Federal Reserve will also announce its policy, and that too would have a bearing on the currency market.

“Between the central bank meeting today, and the Fed meeting tomorrow, the market will get some firm cues for the near term," said the chief dealer with a private bank.