Rupee extends gains against US Dollar as crude oil slips

Weakness in the American currency ahead of the outcome of the Federal Reserve’s policy meeting is also attributed to the rally in the Indian rupee.

Dec 19, 2018 08:12 IST India Infoline News Service

Indian rupee
The Indian rupee got an early Christmas present, as it posted its highest one-day gain since September 2013. The rupee and bond prices extended gains in today’s session after crude oil prices slumped to a near 16-month low.

Rupee rose for the third consecutive session, and currently trading 28 paise higher at 70.16/$.

Further, weakness in the American currency ahead of the outcome of the Federal Reserve’s policy meeting is also attributed to the rally in the Indian rupee.

The bond prices gained today after the Reserve Bank of India said it would inject liquidity into the system via open market operations.

The Reserve Bank of India (RBI) will inject Rs50,000cr under Open Market Operations (OMOs) through five auctions, the central bank said in a press note on Tuesday.

"Based on an assessment of the durable liquidity needs going forward, the RBI has decided to conduct a purchase of Government Securities under Open Market Operations (OMOs) for an aggregate amount of Rs50,000cr in the month of January 2019. The operations will be conducted through five auctions of Rs10,000cr each," the bank said in a press note. Read here

Meanwhile, crude oil prices fell over 7% to hit a low that was last seen in August 2017 amid concern over a supply glut and pessimism on demand due to the trade war and slowing global economic growth.

RBI's reference rate for the dollar stood at Rs70.10, while for the euro, it was at Rs81.53. Further, its reference rate for the yen stood at Rs62.38, while that for the British pound sterling, it was at Rs88.74.

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