The Indian Rupee recovered towards the end of Wednesday after the Reserve Bank of India (RBI) decided to keep its interest rate at 5.5 per cent on its benchmark repo rate in the recent Monetary Policy Committee (MPC) meeting. Market reports show that the domestic currency was closed at 87.73 per dollar against the US dollar, showing an increase of 7 paise as compared to the previous, as per market reports.
The rupee is under pressure even after the slight gain, considering that it has already lost 2.6 per cent of its value to date in the calendar year. The month of July was the weakest in falling since September 2023 in the context of international trade conflicts and a series of outflows on the domestic market. Governor Sanjay Malhotra chaired the RBI, which continued its neutral monetary policy but warned that volatility of currency can continue due to uncertainties of tariffs with the US.
The central bank had revised the outlook of the inflation rate in FY26 to 3.1 per cent as compared to the previous 3.7 per cent. The second quarter FY26 projections were also reduced to 2.1 per cent against 3.4 per cent, but according to the projections, inflation will rise to an approximate level of 4.9 per cent in the first quarter of FY27 as the low rate effect of inflation comes to an end. In the meantime, estimates of GDP growth projections in FY26 are constant at 6.5 per cent.
Stock portfolio continues to endure a selling spree with the foreign portfolio investors (FPIs) dumping more than 35,000 crore worth of domestic equities in 11 successive sessions, as data showed provisional at the National Stock Exchange (NSE).
Crude oil prices in global commodities were moving at a one-month low due to concerns of renewed sanctions on Russian crude buyers. Brent crude increased 1.46 percent to a high of 68.63 dollars per barrel, whilst WTI crude advanced 1.50 percent to a high of 66.14 dollars per barrel at 3.45 pm IST, indicative of marginal recovery in the declining prices.
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