The rupee gained to 81.61 against the US dollar on Thursday as the greenback retreated from a two-decade high against six other peers.
The rupee appreciated by 33 paise to 81.61 against the US dollar on Thursday, , reversing much of the previous day's losses, as the greenback retreated from a 20-year high against six other peers. Falling crude oil prices lent support to the rupee.
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The dollar index — which measures the American currency against a basket of six peers — retreated, but not far from a 20-year peak of 114.7. The index was last up 0.7 percent at 113.3.
Crude oil prices hovered around their lowest levels in nine months. Brent crude futures slumped 5.5 percent to $82.9 a barrel and West Texas Intermediate futures fell 0.7 percent to $81.5 a barrel.
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Investors awaited the outcome of a key meeting of the RBI's rate-setting panel due on Friday for domestic cues.
"On the policy front, the market expects a rate hike of 50 bps by the RBI to rein in retail inflation... With the drying liquidity in the banking system, the policy stance will remain in focus and could be changed to 'neutral' from 'withdrawal of accommodation'," said Amit Pabari, Managing Director at CR Forex.
Any such announcement could lead to high volatility in the rupee, said Pabari, who expects the currency to move within a 81-82.5 range with an upward bias in the near term.
Indian equity benchmarks Sensex and Nifty50 held on to opening gains after a gap-up start on Thursday, led by financial, oil & gas, FMCG and metal shares.
First Published: IST