Rupee settles 6 paise higher at 71.19 against USD as RBI maintains accommodative stance

The rupee on Thursday rose by 6 paise to close at 71.19 against the US dollar after the RBI left the policy rates unchanged but maintained its accommodative stance to boost growth.

Investor sentiments strengthened after the Reserve Bank of India signalled to continue with accommodative stance, while low crude oil prices, weakening of the US dollar and gains in domestic equity market supported the domestic currency, forex traders said.

At the interbank foreign exchange market, the local currency opened on a positive note at 71.22. During the day, it saw a high of 71.11 and a low of 71.30.

The Indian currency finally settled at 71.19, higher by 6 paise against its previous close. The domestic unit had settled at 71.25 against the American currency on Wednesday.

"RBI kept its repurchase rate unchanged at 5.15 per cent, citing higher inflation. That, however, doesn't mean the end of the rate cut cycle. The stance remains accommodative as RBI pointed out economic activity remains subdued and there is policy space available for future action," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

The six-member Monetary Policy Committee (MPC) in the sixth bi-monthly monetary policy review meet of 2019-20, unanimously voted to keep the repurchase or repo rate unchanged at 5.15 per cent while retaining its accommodative stance.