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Rupee ended lower, Pound rose vs. Dollar

Friday,   27-Mar-2020   05:42 PM (IST)

The Indian rupee ended the session lower at 74.85/86 levels compared to its opening at 74.64/65 levels after touching the low of 75.3950/4050 level on dollar purchases by foreign banks amid a retreat in local shares. However, rupee sharply retreated from the day's low of 75.3950 levels on suspected intervention by the RBI in spot as well as in futures. Rupee traded in the range of 74.38- 75.3950 levels. Rupee touched the high of 74.38/39 levels early today after a surge in jobless claims in the world's largest economy sent the dollar index to its worst day in over four years. The Reserve Bank of India slashed interest rates following other central banks, in an emergency move to counter economic fallout from a fast-spreading coronavirus. The RBI said it was maintaining its "accommodative" stance, and would maintain its position "as long as necessary" to revive growth, while ensuring inflation remained within target. The bank's six-member monetary policy committee (MPC) held a meeting this week by video conference to arrive at its decision. It cut the repo rate I by 75 basis points to 4.40%, in line with expectations. The reverse repo rate was reduced 90 basis points to 4% and CRR by 100 bps to 3%. The S&P BSE Sensex closed at 29,816, down 131 points or 0.44 per cent. NSE's frontline index Nifty50 ended at 8,660, up 19 points or 0.22 per cent. Indian federal government bonds soared for the second consecutive week, after RBI slashed the repo rate to a record low, and the central bank conducted an open market purchase of bonds.India's foreign exchange reserves fell to $469.91 billion as of March 20, from $481.89 billion a week earlier, the Reserve Bank of India said on Friday.

Sterling rose on Friday as investors became more confident that the United States government and central bank economic stimulus could alleviate some of the impact of the coronavirus crisis. The U.S. dollar had previously strengthened on the back of its perceived safe-haven status while sterling - considered a riskier currency more closely associated with equity market performance - moved in the opposite direction. Waters have calmed since the U.S. government promised $2 trillion in fiscal stimulus and the Federal Reserve injected more dollars into the financial market by buying U.S. government bonds and swaping dollars for foreign currencies with other major central banks. The British government on Thursday said it will pay grants to self-employed people who have lost their livelihoods because of the coronavirus lockdown, further extending an unprecedented package of measures to bolster the economy. Finance minister Rishi Sunak had previously announced that the state would pay part of employee wages to dissuade companies from implementing layoffs. Sterling was up 0.4% at $1.2253, having touched a near-two-week high of $1.2304. It gained more against the euro, rising by 0.8% to 89.80 pence.