The rupee on Tuesday moved higher to sub-50 level for the first time in 10 weeks for a brief time intra-day before closing flat at 50.09/10 against the U.S. dollar on alternate bouts of buying and selling.
Forex traders partly attributed the early rise in the rupee to the Reserve Bank shifting its policy stance to growth from inflation in its monetary policy review on Tuesday. The central bank cut the cash reserve ratio by 0.50 percentage point.
They added rupee’s initial gains, also on account of continued foreign fund inflows, were offset by a recovery in dollar value overseas amid month-end demand from importers, mainly oil refiners, for the U.S. currency.
At the Interbank Foreign Exchange (Forex) market, the domestic unit opened strong at 50.00/01 a dollar and moved in a range of 49.92 and 50.13, before concluding at 50.09/10, a marginal gain of 1 paisa from its last close.
Meanwhile, the BSE benchmark Sensex also crossed the 17,000-mark to a 10-week high as the Reserve Bank cut cash reserve ratio (CRR) to infuse liquidity in the system before easing a little to close at 16,995.77. The cut in the CRR will infuse Rs. 32,000-crore liquidity into the banking system.