Rupee Opens 30 Paise Higher at 61.88 as RBI Cuts Interest Rates

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The Rupee opened the day sharply higher as the Reserve Bank of India (RBI) cut repo rates by 50 basis points. Repo rates is the interest rate at which RBI lends money to banks.

Rupee Opens 30 Paise Higher at 61.88 as RBI Cuts Interest Rates
The currency was last trading at 61.88 against the dollar as against its previous close of 62.18. The Reserve Bank of India (RBI) as promised in its previous Monetary Policy today cut interest rates outside the monetary policy. The RBI Cut interest rates by 25 basis points to 7.75 per cent from 8 per cent. The RBI's stance was largely to do with a sharp drop in inflation in the last few months and falling crude prices.

"Since July 2014, inflationary pressures (measured by changes in the consumer price index) have been easing. The path of inflation, while below the expected trajectory, has been consistent with the assessment of the balance of risks in the Reserve Bank's bi-monthly monetary policy statements. To some extent, lower than expected inflation has been enabled by the sharper than expected decline in prices of vegetables and fruits since September, ebbing price pressures in respect of cereals and the large fall in international commodity prices, particularly crude oil," the RBI said in a statement.

The Rupee is likely to strengthen further in the coming days, though the cut by the RBI did not surprise the markets. Check currency rates here

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Read more about: rbi, dollar
Story first published: Thursday, January 15, 2015, 9:07 [IST]
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