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Mumbai: The Indian rupee on Tuesday strengthened past the 66 per US dollar mark, bond yields fell sharply and the benchmark Sensex index jumped after the Reserve Bank of India (RBI) surprised the markets with a 50 basis point cut in repo rate.

One basis point is one-hundredth of a percentage point.

The home currency closed at 65.96, up 0.14% from its previous close of 66.05. The local unit opened at 66.33 per US dollar and touched a high and a low of 65.93 and 66.42, respectively.

The Sensex rose 161.82 points, or 0.63%, to close at 25,778.66. The BSE index was trading 300 points down before the policy.

The yield on India’s 10-year benchmark bond closed at 7.611%—a level last seen on 15 July 2013, compared with its Monday close of 7.727%. In intra-day trade, it touched a low of 7.573%—a level last seen on 15 July 2013. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has lost 4.4% against the dollar, while foreign institutional investors (FIIs) have bought $3.84 billion from local equity and $6.22 billion from bond markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.022, down 0.01% from its previous close of 96.034.

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