RBI’s measures for rupee fail to boost Sensex, INR

India News Bulletin Desk
RBI measures to save rupee fails to impress
Image source: Wikimedia Commons

BSE Sensex closed 90.35 points down and the NSE benchmark fell 31.40 points in the wake of RBI’s measures to save the embattled rupee.

India’s central bank, the Reserve Bank of India took measures -- such as raising the limit on foreign investment in government bonds by $5bn to $20bn and increasing the limit of external commercial borrowing (ECB) by $10bn to $40bn -- to stop the rupee from sliding further. The RBI announced other smaller steps too but its measures failed to impress markets and investors.

The BSE benchmark shed 249 points from day's high of 17,131.15, before closing at 16,882.16 with biggest losses coming from sectors such as banking, technology, and automobile. The NSE benchmark closed at 5,114.65.

The rupee opened higher at 56.73 to the dollar on Monday [June 25] and rallied over 1% on hopes of strong measures from RBI. However, the rupee ended at 57.01 to the dollar, marginally higher than Friday’s close of 57.12 following the RBI announcement.

The Indian currency has slipped more than 20% against the dollar this quarter and has raised fears of inflation. High overseas borrowing and fears of repayment has added pressure on the rupee.

Markets were expecting bolder and more aggressive measures from the RBI to reverse the rupee’s downward trend but the RBI failed to impress.

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