Indian rupee vs US dollar: The rupee opened higher on Friday, surging 54 paise to 71.6425 against the US dollar, after retail inflation eased to a 10-month low. Official data released after market hours on Wednesday showed that India’s retail inflation — Consumer Price Index (CPI) — cooled to 3.69% in August, which was below RBI’s target of 4%. Inflation eased on the back of easing prices of fruits, vegetables and other food items.
The rupee also rebounded on the government’s assurance that all steps would be taken to ensure the domestic currency does not depreciate to unreasonable levels, said a PTI report. “No fundamental rationale for rupee to depreciate to levels we saw till yesterday. It reflected overreaction of market operators. Government and RBI will do everything to ensure that rupee does not slide to unreasonable levels,” Economic Affairs Secretary Subhash Chandra Garg said in a tweet on Wednesday.
Around 9.30 am, the rupee, which opened at 71.6950 against the greenback, traded at 71.8175 against the American currency. Indian currency markets were closed on Wednesday on account of Ganesh Chaturthi. “For the Rupee, 71.44 is the major level to watch out above which it may test 70.85. On the flip side, 72.93 is the support level,” Geojit Financial Services said in a note.
The rupee had on Wednesday marked a major recovery from its record low of 72.9150 amid reports that Prime Minister Narendra Modi is likely to hold an economic review meet this weekend to discuss measures on the rupee’s depreciation as well as the rise in oil prices. Following the development, the rupee recouped over 99 paise from its day’s low to a high of 71.9175 against the American currency. On closing, the rupee was up 51 paise over Tuesday’s close, ending the session at 72.1850 against the dollar.