Indian rupee appreciated against US dollar on Tuesday on the back of strong foreign capital inflows. Foreign institutional investors (FIIs) had purchased equities worth Rs 1,992.87 crore on a net basis on Monday, according to exchange data. Some support came as Commerce and Industry Minister Piyush Goyal said that the free trade agreement (FTA) between India and the four-nation European bloc EFTA is likely to come into force from September. Investors took note of a private report that Reserve Bank of India (RBI) has decided to discontinue daily variable rate repo (VRR) auction from June 11 following a review of current and evolving liquidity conditions. The central bank will conduct its last auction on Tuesday, amounting to Rs 25,000 crore. On the global front, Japanese yen recovered from early lows against other major currencies in the European session on Tuesday, as traders speculate that the Bank of Japan (BoJ) will hike interest rates this year.
Finally, the rupee ended at 85.57 (Provisional), appreciated by 09 paise from its previous close of 85.66 on Monday. The currency touched a high and low of 85.68 and 85.51 respectively.
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