New Delhi — The Indian rupee strengthened sharply against the U.S. dollar on Friday after the Reserve Bank of India eased investment norms for foreign portfolio investors and announced measures aimed at improving capital flows.
The domestic currency gained 50 paise to 95.24 against the dollar in intraday trade after opening at 95.72 in the interbank foreign exchange market. It had settled at 95.74 against the dollar in the previous session.
The appreciation came after the RBI kept policy rates unchanged for the second consecutive meeting while announcing steps to improve investment flows and market confidence amid global uncertainty.
Announcing the second bi-monthly monetary policy of fiscal 2027, RBI Governor Sanjay Malhotra said the Monetary Policy Committee unanimously decided to keep the repo rate unchanged at 5.25% while maintaining a neutral policy stance.
The central bank also raised investment limits for nonresident Indians and Overseas Citizens of India in equity instruments and eased norms governing foreign portfolio investment in government securities.
Malhotra reiterated that the RBI’s exchange rate policy remains unchanged and that the central bank does not target any specific level or trading band for the rupee.
Experts said measures such as expanding the Fully Accessible Route for bonds, easing foreign portfolio investor debt investment norms, opening a temporary FCNR(B) deposit window and offering concessional foreign exchange swap facilities are expected to support the rupee and improve dollar inflows.
They added that while the central bank acknowledged risks from elevated crude oil prices and raised its inflation projections, its reassurance on adequate forex reserves, currently around $682 billion, helped boost market confidence.
Global crude oil prices remained elevated, with international benchmark Brent crude trading 0.36% higher at $95.37 per barrel in futures trade.
The RBI also revised its macroeconomic projections, lowering its fiscal 2027 GDP growth estimate to 6.6% from 6.9% earlier and raising its CPI inflation projection to 5.1% from 4.6%. (Source: IANS)
