Rupee rises 4 paise to close at 85.64 against US dollar

The rupee benefited from the initial reaction to the RBI rate cut, but the aggressive rate cut narrows the interest rate differential with global peers, traders said

Mumbai: The rupee appreciated 4 paise to close at 85.64 (provisional) against the US dollar on Monday, supported by a firm trend in domestic equities and foreign capital inflows.

However, elevated global crude oil prices and the US dollar against major rivals overseas restricted its rise, traders said.

The rupee benefited from the initial reaction to the RBI rate cut, but the aggressive rate cut narrows the interest rate differential with global peers, they added.

At the interbank foreign exchange, the domestic unit witnessed a volatile trading session. It opened at 85.61 and moved between a high of 85.45 and a low of 85.72 against the greenback.

The local unit pared all its initial gains and settled in positive territory, 4 paise higher at 85.64 (provisional) against the American currency.

On Friday, the rupee surged 11 paise to close at 85.68 against the US dollar, after the Reserve Bank cut the repo rate by a higher-than-expected 50 basis points to prop up growth.

In the domestic equity market, the 30-share BSE Sensex surged 256.22 points, or 0.31 per cent, to close at 82,445.21, while the Nifty rallied 100.15 points, or 0.40 per cent, to 25,103.20.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.35 per cent at 98.84.

Brent crude, the global oil benchmark, rose 0.24 per cent to $66.63 per barrel in futures trade.

Foreign institutional investors (FIIs) purchased equities worth Rs 1,009.71 crore on a net basis on Friday, according to exchange data.