The Indian rupee strengthened by 50 paise and reached 95.24 against the US dollar on Friday following the Reserve Bank of India's (RBI) announcement of new policy measures.
Forex traders reported an improvement in investor confidence after the RBI relaxed rules for Foreign Portfolio Investors (FPIs) to invest in government securities.
Additionally, the RBI's statement that India's foreign exchange reserves are strong enough to handle external shocks boosted market sentiment, as per PTI report.
The rupee opened at 95.72 against the US dollar and later touched 95.24 during the day, with a 50-paise gain that surpassed Thursday's movement.
The RBI kept key interest rates unchanged for the second straight policy meeting, and Governor Sanjay Malhotra announced the second bi-monthly monetary policy of the current financial year.
The Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 5.25%, and the RBI maintained a 'neutral' policy stance.
The central bank increased investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) in equity instruments.
Global market updates showed the US dollar index trading at 99.40, with global crude oil prices rising 0.36% to USD 95.37 per barrel in futures trading.
India's stock markets were under pressure despite the stronger rupee, with the Sensex falling 142.06 points and the Nifty declining 38.75 points.
The RBI lowered India's GDP growth projection to 6.6% from the earlier estimate of 6.9% and raised its inflation forecast for FY27 to 5.1% from the previous estimate of 4.6%.
