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Rupee recovers against dollar as RBI slashes repo rate by 25 bps

29 Jan 2013 Evaluate

Following a negative start, Indian rupee erased all early losses and recovered against dollar in the late morning session as Reserve Bank of India, has slashed its repo rate by 25 basis points (bps) at 7.75% against 8% earlier, in third quarter review of monetary policy 2012-13. The central bank unexpectedly also reduced the cash reserve ratio (CRR), of scheduled banks by 25 bps to 4%, which will infuse an additional Rs 180 billion into the banking system. However, the month end demand for dollars from the importers restricted local unit’s gains.

The partially convertible currency is currently trading at 53.66, stronger by Rs 25 paise from its previous close of 53.91 on Monday. The currency has touched a high and low of 53.95 and 53.66 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 53.89 and for Euro it stood at Rs 72.50 on January 28, 2013. While, the RBI’s reference rate for the Yen stood at 59.29, the reference rate for the Great Britain Pound (GBP) stood at 84.9260. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date

1US$

1GBP

January 28, 2013

53.89 84.9260

January 24, 2013

53.85

85.2550

(RBI-reference rate)

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