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Rupee Rebounds From New Five-Month Low Against Dollar: 10 Points
08 Aug 2019, 01:10 PM IST 
Analysts expect the currency to move in a narrow range in the near term
- Domestic stock markets registered mild gains amid cautious trade on Thursday, with the S&P BSE Sensex gaining over 200 points at day's high and the broader NSE Nifty benchmark trading near the 10,900 mark.
- In its third bi-monthly policy review of 2019-20 on Wednesday, the RBI's Monetary Policy Committee (MPC) cut the repo rate - the key interest rate at which it lends short-term funds to commercial banks - by 35 basis points to a nine-year low of 5.40 per cent.
- It lowered its economic growth forecast to 6.9 per cent from 7 per cent for the current fiscal year, and said it sees inflation remaining inside its target range over a 12-month horizon.
- The RBI highlighted that liquidity in the system was in a large surplus over the past two months.
- Analysts expect the currency to move in a narrow range in the near term. "The RBI and government are making a concerted effort to push growth. The worst of expectations are already factored in," forex advisory firm IFA Global said in a note.
- Foreign fund outflows and rising crude oil prices weighed on the rupee.
- Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 383.66 crore on Wednesday, provisional data from the NSE showed.
- Crude oil prices jumped by more than $1.5 a barrel on Thursday, recovering half of the nearly 5 per cent losses in the previous session, on expectations that lower prices may lead to production cuts. Brent crude futures - the global benchmark for crude oil - rebounded to $57.75 a barrel at one point on Thursday, up 2.7 per cent from their previous close.
- The dollar index - which gauges the greenback against six peers - was flat in afternoon.
- The rupee is expected to move in a range of 70.65-71.10 in the near term, and a close below 70.50 could cause the current upmove to lose steam, IFA Global added.