Indian rupee strengthened against the US dollar on Tuesday driven by firm domestic equities after the Reserve Bank of India (RBI) announced various measures to maintain stability in the financial system during the corona virus pandemic including two more tranches of special OMOs in its ‘Operation Twist’, while also raising the held to maturity limit under the statutory liquidity ratio for banks. Further, weak American currency overseas too supported domestic currency. Though, the sharp decline in Q1 gross domestic product and fresh border tensions between India and China is expected to keep rupee volatile. Meanwhile, Foreign Institutional Investors (FIIs) sold shares worth Rs 3,395.49 crore on Monday, exchange data showed. On the global front, the US dollar declined toward multi-year lows against its peers as the US Federal Reserve’s new policy framework continued to fuel bets that US rates will stay lower for longer than other countries.
The partially convertible currency is currently trading at 72.80, stronger by 80 paise from its previous close of 73.60 on Monday. The currency touched a high and low of 73.1975 and 72.7500 respectively. The reference rate for the dollar stood at 73.35 and for Euro stood 87.06 on August 28, 2020. While the reference rate for the Yen stood at 69.03, the reference rate for the Great Britain Pound (GBP) stood at 97.28.
