Rupee had had record lows against the US dollar in the previous session
Global equity markets, including domestic stocks, are up sharply today
The Indian rupee today moved sharply higher against the US dollar amid an improvement in risk sentiment. Other Asian currencies have also moved higher against the US dollar. The rupee today opened at 76.56 and closed at 76.40 per US dollar after moving in the range of 76.35 to 76.63 against US dollar. The rupee had closed at 76.86 per dollar in the previous session after it hit a new low of 76.87.
Indian stock market benchmark index Sensex was up nearly 1000 points today tracking firm Asian markets.
The Reserve Bank of India today cut its reverse repo rate by 25 basis points on Friday, in a bid to push banks to deploy excess funds within the system toward lending, and help revive growth. The RBI also announced measures to boost liquidity in the system.
Asian stocks gained traction today after US President Donald Trump's announced plans to gradually re-open the US economy. Data from China showed the world's second-largest economy shrank for the first time since at least 1992 because of the coronavirus outbreak and tough containment measures. Gross domestic product contracted 6.8% in the quarter year-on-year, but it was better than some estimates.
"US President Donald Trump on Thursday announced guidelines for states to reopen their economy in three phases depending on meeting the specific case counts and hospital capacity thresholds. Asian currencies are stronger against the US Dollar amid a positive risk tone," said Abhishek Goenka, founder and CEO, IFA Global.
Some analysts expect the rupee to remain under pressure. “The extension of lockdown in India is likely to severely impact the Indian economy as well. Hence the rupee is expected to remain under pressure. However, sharp decline in the crude oil prices and huge amount of foreign exchange reserves may contain losses in the rupee," said Rushabh Maru, research analyst at Anand Rathi Shares and Stock Brokers.