Rupee gains 3 paise to close at ₹77.75 against U.S. dollar

The rupee appreciated by 3 paise to settle at ₹77.75 (provisional) against the U.S. dollar on June 8 after the RBI raised the interest rate by 50 basis points to 4.9%.

However, weak domestic markets, rising oil prices and persistent foreign capital outflows restricted the rupee’s gain, forex dealers said.

The Reserve Bank of India on June 8 raised the key interest rate by 50 basis points, the second increase in five weeks, to rein in the rise in prices that it saw continuing to hurt consumers in the near term.

The rate hike comes on the back of a 40 bps increase effected by the RBI at an unscheduled meeting on May 4.

At the interbank forex market, the local unit opened strong at ₹77.70 against the greenback and witnessed an intra-day high of ₹77.64 and a low of ₹77.79. It finally settled at ₹77.75, a rise of 3 paise over its previous close.

In the previous session, the rupee had settled at a lifetime low of ₹77.78 against the greenback.

On the domestic equity market front, the BSE Sensex ended 214.85 points or 0.39% lower at 54,892.49, while the broader NSE Nifty slipped 60.10 points or 0.37% to 16,356.25.

The dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.20% to 102.52.

Brent crude futures, the global oil benchmark, rose 0.96% to $121.73 per barrel.

Foreign institutional investors were net sellers in the capital market on June 7 as they offloaded shares worth Rs 2,293.98 crore, as per exchange data.

Meanwhile, the RBI retained its GDP growth forecast at 7.2% for the current fiscal but cautioned against negative spillovers of geopolitical tensions and a slowdown in the global economy. It also upped the inflation projection for the current fiscal to 6.7% from the 5.7% forecast in April.