Rupee recovered from lows to end nearly flat against US dollar

The rupee staged smart recovery from intra-day lows to close with a marginal 2 paise loss at 75.46 (provisional) against the US dollar on Wednesday after the Reserve Bank left the key policy rate unchanged and retained its accommodative policy stance to support economic growth.

A massive rally in the domestic equities and softening crude prices in the international market lent some support to the local unit, forex traders said.

At the interbank forex market, the local unit opened strong at 75.38 against the greenback but could not hold on to the gains and slipped into negative territory. 

The local unit witnessed an intra-day high of 75.36 and a low of 75.57.

It finally ended at 75.46 against the American currency, registering a fall of 2 paise over its previous close of 75.44.

The Reserve Bank of India on Wednesday kept borrowing costs at a record-low for the ninth consecutive time, as it decided to continue supporting economic growth amid uncertainty over the impact of the Omicron strain on the economy.

The reverse repo rate -- the level at which it absorbs excess cash from lenders -- was kept unchanged at 3.35 per cent.

It kept the GDP growth projections unchanged at 9.5 per cent for the current fiscal and retained the inflation forecast of 5.3 per cent for the full year.

On the domestic equity market front, the BSE Sensex ended 1,016.03 points or 1.76 per cent higher at 58,649.68, while the broader NSE Nifty rose 293.05 points or 1.71 per cent to 17,469.75.

Brent crude futures, the global oil benchmark, fell 0.52 per cent to USD 75.05 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.17 to 96.21.
Foreign institutional investors remained net sellers in the capital markets, pulling out Rs 2,584.97 crore on Tuesday, as per provisional data.