Rupee Edges Higher To 69.20 Against US Dollar

The rupee edged higher against the dollar on Friday, a day after the Reserve Bank of India lowered the repo rate by 25 basis points and adopted an "accommodative" stance. The rupee opened at 69.24 against the greenback in the interbank forex market and advanced by eight paise to 69.20 at the strongest point in morning, compared with its previous close of 69.28. Steadiness in the dollar overseas along with a recovery in the domestic equity markets supported the rupee, according to analysts.

The RBI on Thursday lowered the repo rate - the key interest rate at which it lends short-term funds to commercial banks - to a nearly nine-year low of 5.75 per cent, and changed its stance to "accommodative" from "neutral", triggering hopes of further rate cuts going forward.

"The RBI policy was dovish. Monetary Policy Committee members voted unanimously for a rate cut as well as a change in stance. This eliminates any uncertainty with respect to the direction of rates," forex advisory firm IFA Global said in a note. 

The rupee was last seen trading at 69.27 against the dollar, up 0.01 per cent, in late morning deals. 

Foreign funds pulled out Rs 1,448.99 crore in the capital markets on a net basis on Thursday, according to provisional data from the National Stock Exchange (NSE).

However, gains of more than 1 per cent in global oil prices limited the gains in the rupee against the dollar. 

Crude oil prices climbed further away from five-month lows hit earlier in the week after a report that Washington could postpone trade tariffs on Mexico and amid signs that the top producers may extend their supply cuts.

Brent crude futures - the international benchmark for crude oil - were last seen trading 1.4 per cent higher at $62.51 per barrel, after advancing 1.7 per cent the previous day. 

Brent had hit its lowest mark since mid-January at $59.45 a barrel on Wednesday, after US crude output reached a record high and stockpiles climbed to their highest since July 2017.