The Indian rupee appreciated against the dollar in early trades on Friday, 08 February 2019 after the Reserve Bank of India (RBI) cut the repo rate and changed its policy stance to neutral. The Reserve Bank lowered the policy rate by 25 bps to make the most of the space offered by the softening in prices, and will deliver more on the rate front if its lower inflation estimates are achieved, governor Shaktikanta Das said Thursday. The surprise 25 basis points rate cut to 6.25 percent is a measure to broad base credit growth across all the sectors of the economy thats gathering more steam now, the governor said. However, lower opening to domestic shares limited gains in the local unit.
The domestic currency opened 8 paise higher at 71.38 against the US dollar and registered an intra-day high and low of 71.2750 and 71.44 so far during the day. In the spot currency market, the Indian unit was last seen trading at 71.28. The local currency on Thursday settled 11 paise at 71.45 against the greenback.
Domestic benchmark indices were trading lower in early trade, mirroring negative leads from Asian markets and overnight slide on the Wall Street. At 9:20 IST, the barometer index, the S&P BSE Sensex, was down 136.44 points or 0.37% at 36,834.65. The Nifty 50 index was down 44.35 points or 0.40% at 11,025.05.
Overseas, stocks in Asia slipped on Friday amid growing concerns over the trade fight between the US and China. President Donald Trump on Thursday said he would not meet with Chinese President Xi Jinping before the 2 March deadline to reach a Chinese-US trade deal.
Meanwhile, the dollar held near a two-week high on Friday, as demand for safe-haven assets rose on uncertainties about the path of U.S.-China trade negotiations and broader worries about slowing global growth. The dollar index, a gauge of its value versus six major peers was up by around 0.1 percent at 96.59, sitting just shy of its two-week high.