The Indian rupee appreciated by 8 paise against the US currency in early trade today on expectations of firm opening of the domestic stock markets after the Reserve Bank of India cut key interest rates.
At the Interbank Foreign Exchange (Forex) market, the domestic currency was quoted at 51.46 a dollar, a gain of eight paise over the previous close of 51.54/55 a dollar.
Forex dealers said the rupee gained on expectations of fresh capital inflow from foreign funds in the domestic stock markets, after RBI announced a cut in its overnight lending and borrowing rates last evening.
Also, some dollar selling by banks and exporters at higher levels and the US currency's weakness against other major currencies also helped the rupee appreciate, they added.
The Reserve Bank yesterday unveiled a fresh monetary stimulus that slashed the rates at which it lends and borrows short-term funds from banks by half a per cent.
RBI cut repo (overnight lending rate) by 50 basis points to 5 per cent and reverse repo (overnight borrowing rate) identically to 3.5 per cent with immediate effect.
Yesterday, the rupee ended 43 paise higher at 51.54/55 against the USD.
