MUMBAI: The Indian rupee fell on Friday, singed by likely dollar outflows and traders lowering long bets, but posted its best rise in over three years after New Delhi and Washington announced a long-awaited trade deal.
The rupee closed at 90.6550 per dollar, down 0.3 percent on the day but up 1.4 percent on the week, its best weekly rise since January 2023.
India’s central bank kept its key repo rate unchanged, buoyed by a positive economic outlook and reduced pressures following trade deals with the US and Europe. The monetary policy stance was retained at “neutral”, suggesting rates will stay low for some time to come.
“Going forward, we think the MPC will be guided by the evolving macroeconomic conditions and the outlook based on data from the new series in charting the future course of monetary policy,” economists at Barclays said in a note. The rate decision had little bearing on the rupee, which was hit by outflows, traders said.
Strong appetite to buy dollars at the daily reference rate led to weakness earlier in the session. The fall worsened as stop-losses were triggered on long-rupee wagers, a trader at a Mumbai-based bank said.
This eroded gains for the week, which were largely powered by a rally on Tuesday after the US and India announced they had reached a trade deal following months of negotiation.
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