RBI Keeps Rate Unchanged, Rupee Breaches 74-Mark

NEW DELHI — The Reserve Bank of India said on Friday it has been trying to ensure the foreign exchange market remains liquid and is not targeting any particular level.

“The RBI’s response to these unsettled conditions has been to ensure the foreign exchange market remains liquid with no undue volatility,” the central bank’s governor, Urjit Patel, said after monetary policy meeting, reports news agency Reuters.

“There is no target or band around any particular level of the exchange rate which is determined by the market forces of demand and supply,” he said.

The rupee breached the 74-mark against US dollar for the first time today as the RBI announced its key policy rate would remain unchanged.

The rupee was quoted 55 paise lower at 74.13 against the dollar soon after the RBI announced its monetary policy, reported PTI. The central bank retained the repo rate unchanged at 6.50 per cent, while the reverse repo rate also stayed at 6.25 per cent.

At the Interbank Foreign Exchange (Forex) market, the rupee opened higher at 73.56 a dollar against its previous record low closing of 73.58 on Thursday, but failed to sustain the initial strength and fell back to breach the 74 mark.

Meanwhile, the BSE Sensex too plunged by 584.53 points, or 1.66 per cent, to 34,584.63 in late afternoon trade.

Announcing the monetary policy, RBI governor Urjit Patel said that the depreciation of rupee against dollar has been comparatively moderate in comparison to currencies of other emerging markets economies, ANI reported. 

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