Rupee MPC opens stronger against US dollar before decision

Beyond the RBI’s announcement of monetary policy, Indian rupees strengthened on Friday.

According to Bloomberg, the local currency opened up to Rs 87.47 from 11 money as compared to greenback. It closed at Rs 87.58 on Thursday.

Anil Kumar Bhansali, head of Treasury and executive director of Finerex Treasury Advisors LLP, said, “The Indian rupee kept logging in fresh offerings, about 87.60 yesterday in currency and RBI allowed flexibility for more unstable movements in the currency pair.”

Bhansali hopes that on Friday, there will be a trade of rupee in 87.30 to 87.70 range on Friday with a weak bias. Exporters have to wait and see the movement before taking a call, importers to buy all dips.

The RBI will announce monetary policy at 10 am today, in which 77% market participants will be expected to cut 25 bPS rates. This will be cut in a historic rate, as it is coming after about five years, with the last May 2020. This decision damages the development due to economic activity and Trump’s tariff hazards amid increasing concern worldwide. According to Bhansali, this will be the first policy of Sanjay Malhotra after taking over in December 2024.

The Reserve Bank of India expects the interest rate to trim the interest rate from 25 basis points to 6.25% in the policy meeting ended on Friday. The Central Bank has already announced liquidity growth measures that have improved the conditions in the market. It appeared to be a condition for cutting rates, Kunal Sodani said to the FX hub.