Mumbai: The rupee on Friday strengthened the most in 22 months, after the US Federal Reserve kept its policy rates unchanged, causing a rally in emerging markets asset classes.
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Mumbai: The Indian rupee firmed up further from its early gains by 46 paise to 66 against the American currency in late-morning deals on heavy dollar selling from banks and exporters amid surging equities.
The Fed on Thursday cited worries about the global economy as a key factor compelling it to keep its monetary policy unchanged for now, but left open the possibility of a modest policy tightening later this year. Following the Fed meet, the dollar lost 1.3 per cent against the euro, sinking to $1.1436 per euro, and by smaller amounts against the yen and pound.
India’s two main inflation gauges showed continued easing, according to separate reports on Monday, adding pressure on RBI Governor Raghuram Rajan to cut the benchmark repurchase rate that he has already reduced by 75 basis points this year.
The yield on India’s 10-year benchmark bond closed at 7.697%, a level last seen on 1 June, compared with its Wednesday close of 7.755%. Bond yields and prices move in opposite directions.
Most Asian currencies closed higher.
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The Dollar index, a measure of the value of the U.S. dollar relative to a basket of foreign currencies, rose 0.10 percent to trade at 94.64.
