Rupee Gains 3 Paise To Close At 77.75 Against US Dollar

The rupee appreciated by 3 paise to settle at 77.75 (provisional) against the US dollar on Wednesday after the RBI raised the interest rate by 50 basis points to 4.9 per cent.

However, weak domestic markets, rising oil prices and persistent foreign capital outflows restricted the rupee's gain, forex dealers said.

The Reserve Bank of India on Wednesday raised the key interest rate by 50 basis points, the second increase in five weeks, to rein in the rise in prices that it saw continuing to hurt consumers in the near term.

The rate hike comes on the back of a 40 bps increase effected by the RBI at an unscheduled meeting on May 4.

At the interbank forex market, the local unit opened strong at 77.70 against the greenback and witnessed an intra-day high of 77.64 and a low of 77.79. It finally settled at 77.75, a rise of 3 paise over its previous close.

In the previous session, the rupee had settled at a lifetime low of 77.78 against the greenback.

On the domestic equity market front, the BSE Sensex ended 214.85 points or 0.39 per cent lower at 54,892.49, while the broader NSE Nifty slipped 60.10 points or 0.37 per cent to 16,356.25.

The dollar index, which measures the greenback's strength against a basket of six currencies, rose 0.20 per cent to 102.52.

Brent crude futures, the global oil benchmark, rose 0.96 per cent to USD 121.73 per barrel.

Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,293.98 crore, as per exchange data.

Meanwhile, the RBI retained its GDP growth forecast at 7.2 per cent for the current fiscal but cautioned against negative spillovers of geopolitical tensions and a slowdown in the global economy. It also upped the inflation projection for the current fiscal to 6.7 per cent from the 5.7 per cent forecast in April.