Rupee settles on a flat note at 82.96 after RBI monetary policy decision

The rupee settled on a flat note at 82.96 (provisional) against the US dollar on Thursday, after the Reserve Bank decided to keep the key policy rate unchanged for the sixth time to maintain a tight vigil on inflation. Forex traders said a negative trend in domestic equities weighed on investor sentiments.

At the interbank foreign exchange, the rupee opened at 82.94 against the dollar moved in a narrow range and settled for the day at 82.96 against the American currency, as the central bank retained the repo rate at 6.5 pc for the sixth consecutive time. During the day, the rupee touched an intraday high of 82.89 and a low of 83 against the US dollar. On Wednesday, the rupee appreciated 9 paise to close at 82.96 against the dollar.

The Indian rupee remained flat as RBI maintained the status quo in its monetary policy for the sixth consecutive time and left the Repo Rate unchanged at 6.5 per cent, in line with street expectations. The central bank revised FY24 GDP projections higher at 7.3 per cent from 7 per cent and projected FY25 GDP at 7 per cent. It also projected CPI (consumer price-based inflation) in FY25 lower at 4.5 per cent.

However, the rupee lost earlier gains as domestic markets declined and US dollar also recovered. "We expect rupee to trade with a slight negative bias on expectations that US dollar may recover amid hawkish US Fed speak and geopolitical tensions," said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas. Israeli Prime Minister rejected a peace proposal by Hamas which may also lead to a rise in crude oil prices. However, positive global markets may support the rupee at lower levels. Traders may take cues from weekly unemployment claims data from US and speeches by various Fed officials.