Rupee gains 13 paise against dollar in early trade post RBI rate cut

Mumbai: The rupee on Friday appreciated by 13 paise to 71.32 against the US dollar in early trade after the Reserve Bank of India cut the repo rate and changed its policy stance to 'neutral'.

Force traders said the surprise rate cut by the RBI, weakening of the US dollar as against other currencies overseas and easing crude prices supported the local unit.

At the Interbank Foreign Exchange, the rupee opened higher at 71.37 then gained further ground to touch 71.32 against the US dollar, showing a gain of 13 paise over its previous closing. The rupee on Thursday appreciated by 11 paise to close at 71.45 against the US dollar.

At the sixth bi-monthly monetary policy review on Thursday the RBI surprisingly reduced the repo rate by 25 basis points to 6.25 per cent and also changed the policy stance to 'neutral' from the earlier 'calibrated tightening'. Brent crude, the global benchmark, was trading at USD 62.33 per barrel, lower by 0.57 per cent.

Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net of Rs 418.01 crore, and domestic institutional investors (DIIs) purchased shares worth Rs 294.11 crore on Thursday, provisional data showed. Meanwhile, domestic equity market opened on a weaker note.

The 30-share BSE benchmark Sensex, was trading at 36,808.80, down 162.29 points in early trade. The wide-based Nifty was also trading up by 45.50 points at 11,023.90.