Spot Indian Rupee closed stronger on Monday on the back of strength in Domestic Equity markets amid Domestic Central bank’s efforts towards boosting liquidity conditions. The recent continued rise in Domestic stock markets has raised hopes of fresh foreign fund inflows, which could also see rupee being strengthened.
The Reserve Bank of India reduced the Repo rate, (its main short-term lending rate) by 50 basis points to 7.5 percent and the CRR by 100 basis points to 5.5 percent unexpectedly on Saturday.
Further room for more rate cuts in coming times, amid a drop in inflation figures, tighter money markets conditions and a weaker U.S. economy can not be ruled out.
India's economy grew 9 percent prior to March and the central bank expects 7.5 to 8.0 percent growth this year. India's main share index was up after a cut in interest rates and reserve requirements over the weekend, which has boosted the sentiment.
Prices strengthened after an initial closing below 49.50. Important Trend-line support points now stand between 48.20/40, while resistances are between 49.05/49.25.
The MCX-SX active November contract registered a strong volume increase of around 114.33% over the previous session. The MCX-SX November contract closed towards 48.9425.
