By Anushka Trivedi
MUMBAI, April 6 (Reuters) - The Indian rupee moved in a
narrow band, while forward premiums declined on Thursday after
the Reserve Bank of India (RBI) surprised markets by holding
rates steady.
The rupee traded up 0.04% at 81.97 per U.S. dollar
by 11:25 a.m. IST, having declined up to 82.0525 immediately
after the RBI announced its decision. The currency has held a 15
paisa range so far in the session.
The USD/INR 1-year annualised forward premium tumbled to 2.49%, from 2.60% ahead of the policy
decision. The March forward premium declined to 1.930
rupees, from 2.01 rupees.
The RBI held its key repo rate at 6.50%, citing risks to
growth following the recent global financial turmoil, after
having raised it at each of its six previous meetings.
Most analysts had expected one final 25 basis point hike.
However, the central bank kept its stance at "withdrawal of
accommodation" amid elevated core inflation and Governor
Shaktikanta Das said the pause was "for this meeting only".
"(The statement) is clearly giving more stress to a fluid
and uncertain global situation, implying macro assessments might
require appropriate adjustments ahead from a policy
perspective," said Madhavi Arora, lead economist at Emkay Global
Financial Services.
The "material improvement" in the external sector outlook
amid an easing trade deficit has implied support for the rupee
from the current account side and has given the RBI some
breathing room, Arora added.
RBI Governor Das, in his statement, stressed on maintaining
the rupee's stability and announced a measure to deepen forex
markets in the country by proposing to permit banks with IFSC
banking units to offer non-deliverable derivative contracts
involving the rupee to resident users in the onshore market.
(Reporting by Anushka Trivedi; Editing by Savio D'Souza)
anushka.trivedi.thomsonreuters.com@reuters.net))
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