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.
"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