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    Rupee opens higher at 71.38 a dollar, bond yields fall

    Rupee opens higher at 71.38 a dollar, bond yields fall

    Rupee opens higher at 71.38 a dollar, bond yields fall
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    By Aastha Agnihotri   IST (Published)

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    Indian rupee extended previous session’s gains and opened higher against the greenback on Friday, after the Reserve Bank of India (RBI) cut repo rate by 25 basis points and changed its monetary policy stance to “neutral” from “calibrated tightening”.

    Indian rupee extended previous session’s gains and opened higher against the greenback on Friday, after the Reserve Bank of India (RBI) cut repo rate by 25 basis points and changed its monetary policy stance to “neutral” from “calibrated tightening”.
    At 09:10 AM, the rupee was trading at 71.36 a dollar, up 9 paise from its Thursday’s close of 71.45. The home currency opened at 71.38 and touched a high and a low of 71.33 and 71.39 a dollar, respectively.
    The RBI surprised the markets by reducing repo rate to 6.25 percent from 6.50 percent earlier. All 6 monetary policy committee members voted in favour of a change in stance to "neutral" while they voted 4-2 in favour of a rate cut.
    A rate cut benefits the rupee by increasing confidence on the economic outlook and sparks hopes of more foreign inflows.
    The RBI also announced removal of a restriction on foreign portfolio investor from having an exposure of more than 20 per cent of its corporate bond portfolio to a single corporate.
    Globally, the dollar was little changed at 109.760 yen, nudged off a high of 110.09 reached the previous day.
    In commodity markets, oil prices were held back by concerns over a global economic slowdown but supported by supply cuts led by producer club OPEC and US sanctions against Venezuela.
    Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net of Rs 418.01 crore, and domestic institutional investors (DIIs) purchased shares worth Rs 294.11 crore Thursday, provisional data showed.
    In debt markets, the yields on the 10-year government bonds down 0.30 percent to 7.30 percent from its previous close of 7.32 percent. Bond yields and prices move in opposite directions.
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