The Indian rupee strengthened against the U.S. dollar in the morning deals on Tuesday, after the nation’s central bank lowered its key interest rates by a more-than-expected 50 basis points.
The Reserve Bank of India, governed by Raghuram Rajan, cut its repo rate to 6.75 percent from 7.25 percent and the reverse repo rate to 5.75 percent from 6.25 percent with immediate effect. The bank was expected to reduce the rate by a quarter point today.
Meanwhile, the cash reserve ratio was maintained at 4.00 percent as widely expected by economists.
Against the U.S. dollar, the rupee rose to 66.1200 from an early near 2-week low of 6.4500. At yesterday’s close, the rupee was trading at 66.1500 against the greenback.
If the rupee extends its uptrend, it is likely to find resistance around the 65.40 area.
The material has been provided by InstaForex Company – www.instaforex.com