The rupee gained against US Dollar on increased dollar selling by banks and exporters amid foreign fund inflows.
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Meanwhile, the dollar jumped after the Bank of Japan altered its policy framework, and investors bought back the USA currency ahead of the outcome of the Federal Reserve’s policy meeting later in the session.
Finally, the rupee ended at 66.67, 35 paise stronger from its previous close of 67.02 on Wednesday.
The country’s current account deficit narrowed sharply to just $300 million, or 0.1 per cent of GDP, in the June quarter, driven by lower trade deficit on deeper import contraction. The currency touched a high and low of 66.89 and 66.67 respectively. A lower CAD provides stability to rupee.
The Indian rupee advanced against the USA dollar in late morning deals on Thursday, as regional stocks gained after the Fed’s decision to delay raising interest rates.
Emerging market currencies also rallied against the United States dollar after the Fed decision.
In the meantime, Bank of Japan (BoJ) kept interest rates on hold at minus 0.1 per cent in an overhaul of its massive stimulus programme but did not rule out taking them further into negative territory if needed, marking the latest attempt to boost inflation and kickstart the torpid economy. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.85 and for Euro stood at 75.02 on September 22, 2016.
In cross-currency trades, the rupee retreated sharply against the pound sterling to close at 87.07 from 86.79 and fell back against the euro and settled at 74.89 as compared to 74.67 yesterday.
It, however, continued to drift against the Japanese yen and concluded at 66.12 from 65.76 per 100 yens earlier.
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Meanwhile, the Sensex fell 15.78 points or 0.06 per cent to 28,507.42.
