Forex Update: Rupee gains 14 paise to end at 61.88 against US dollar after RBI policy review

The rupee on Tuesday gained 14 paise to close at 61.88 against the Greenback on increased selling of the US dollar by exporters and banks even as stock markets fell.

Selling of the American unit by exporters and some banks for the second day in a row amid sustained capital inflows supported the rupee even as the US dollar gained in global markets, forex dealers said.

"Rupee appreciated by almost quarter per cent taking cues from the positive comments given by the RBI during the announcement of credit policy," Pramit Brahmbhatt, the CEO of Veracity Group, said.

The Reserve Bank of India (RBI) kept its key policy rates unchanged in its fifth bi-monthly monetary policy review and made dovish comments regarding rate cut as early as March 2015 if disinflationary process set in.

At the Interbank Foreign Exchange (Forex) market, the rupee commenced better at 61.99 against the US currency from its previous close of 62.02 and immediately touched a low of 62.02 on weak local equities amid a firm dollar overseas.

Later, the domestic unit bounced back on dollar selling by exporters and some banks to a high of 61.87 before concluding at 61.88, logging a net rise of 14 paise (or 0.23 per cent).

Meanwhile, the benchmark Bombay Stock Exchange (BSE) index Sensex plunged further by 115.61 points while FPIs/FIIs picked up shares worth US $64.04 million on Monday.