Mumbai: The Indian rupee rose against the US dollar on Tuesday after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points in its second quarter monetary policy review and slashed the interest rate on Marginal Standing Facility (MSF), RBI’s emergency borrowing window for banks, by an identical margin. RBI hiked the repo rate to 7.75% and cut the MSF rate to 8.75%. The partially convertible rupee closed at 61.3213 per dollar, up 0.33% from its previous close of 61.5250. The rupee opened at 61.6050 a dollar and touched a high and a low of 61.32 and 61.72, respectively, in the intra-day trading. Yield on the 10-year bond ended at 8.561%, down 10.3 basis points from its previous close of 8.664%. The dollar index, which measures the US currency’s strength against major currencies, was trading at 79.484, up 0.30% from the previous close of 79.246. Economists said the sense of stability that has returned to the currency market in recent weeks gave room to RBI to continue with its liquidity easing stance. Since January this year, the rupee has weakened 10.32% and has lost the third most after the Indonesian rupiah and Japanese yen among Asian currencies during that period. India’s benchmark equity index, the Sensex, ended at 20,929.01, up 1.74%, or 358.73 points, from the previous close.

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