The central bank''s monetary policy kept the rupee stable at 39.3850/3950 against a dollar on Jan 30 despite the fears of capital outflows from stock markets. The domestic unit touched the low of 39.4350 a dollar as investors pared rupee holdings following continued bearish trend in equity markets, coupled with the possibility of intervention by the apex bank. An expected cut in benchmark lending rates by US Fed Reserve also weighed on the rupee sentiments. A majority of dealers expressed the view that capital inflows will increase due to wide differential in interest rates in US and India, aiding a surge in local currency.
The rupee traded in a range of seven paise during the day in nervous trade with foreign funds pulling out nearly $4.0 billion in the second fortnight of the current month. Meanwhile, the benchmark Sensex on the Bombay Stock Exchange ended lower by over 300 points at 17,758.64, a net fall of 333.30 points, or 1.84 per cent, from its last close. The 30-share index ended in red for the third day in a row. The Reserve Bank of India kept all key rates steady in its quarterly review of monetary policy yesterday while analysts anticipated a rate cut, if the market turmoil affected growth and financial stability.
The rupee traded in a range of seven paise during the day in nervous trade with foreign funds pulling out nearly $4.0 billion in the second fortnight of the current month. Meanwhile, the benchmark Sensex on the Bombay Stock Exchange ended lower by over 300 points at 17,758.64, a net fall of 333.30 points, or 1.84 per cent, from its last close. The 30-share index ended in red for the third day in a row. The Reserve Bank of India kept all key rates steady in its quarterly review of monetary policy yesterday while analysts anticipated a rate cut, if the market turmoil affected growth and financial stability.
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