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Rupee ends flat as RBI kept repo rate unchanged

06 Aug 2020 Evaluate

Indian rupee ended flat on Thursday due to mild dollar demand from banks and importers. Sentiments got some support with Director General of Foreign Trade Amit Yadav’s statement that the Directorate General of Foreign Trade will realign itself along the lines of Prime Minister’s Make in India and will push for production of items domestically to cut down imports. However, traders remained cautious as RBI has kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0 per cent. Consequently, the reverse repo rate under the LAF remains unchanged at 3.35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent. On the global front, Pound strengthened to a new five-month high against the dollar and headed for the $1.32 mark after the Bank of England indicated that any move to cut rates below 0% was not imminent despite the economy’s slow recovery from the coronavirus hit.

Finally, the rupee ended unchanged from its previous close of 74.94 on Wednesday. The currency touched a high and low of 74.95 and 74.77 respectively. The reference rate for the dollar stood at 74.90 and for Euro stood at 88.53 on August 05, 2020. While the reference rate for the Yen stood at 70.91, the reference rate for the Great Britain Pound (GBP) stood at 97.99.

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