Rupee gains as interest rates left intact

Rupee gains as interest rates left intact

New Delhi: The rupee advanced for the sixth day after the central bank left interest rates unchanged, reinforcing speculation that India’s yield advantage over the US will widen.

The currency traded near the highest in nine-and-a-half years after the Reserve Bank kept its overnight lending rate at 7.75% on Tuesday and instead raised the amount of cash that banks must set aside.

The currency rose 0.1% to 39.39 against the dollar at close, and has gained 12.5% this year.

The US Federal Reserve was scheduled to start a meeting later in the day to decide on interest rates. Overseas buying in Indian equities increased following the 18 September Fed decision to reduce borrowing costs.