- Indian Rupee (INR) advances post RBI
- RBI forecasts 10.5% growth in FY 2021/22
- US Dollar (USD) declines after NFP
- 49K jobs created unemployment rate falls to 6.3%
The US Dollar Indian Rupee (USD/INR) exchange rate is slipping lower paring gains from the previous session. The pair settled +0.2% lower on Thursday at 92.95. At 13:30 UTC, USD/INR trades -0.06% at 72.90.
The Reserve Bank of India, as expected, voted unanimously to kept the main interest rate unchanged at 4%. There was no change in the policy stance of central bank which remains accomadative and has been since the start of the pandemic.
However, the RBI caught the markets slightly off guard by raising the cash reserve ratio banks by 50 basis points to 3.5% in a move which signals the start of normalisation.
Meanwhile the RBI governor Shakitikanta Das sounded optimistic about the outlook for the Indian economy and the prospects for a strong recovery. The central bank sees the country’s GDP rebounding by 10.5% in fiscal year 2021-22. The RBI sees this recovery as front loaded with as much as a 26% surge in GDP in H1.
The US Dollar is dropping sharply lower versus the Indian Rupee and its major peers. The US Dollar Index, which measures the greenback versus its major peers trades -0.3% at 91.30 following a mixed US jobs report.
The headline figure from the closely watched US Labour Department’s job report revealed 49,000 jobs were created in the US in January, this was roughly in line with the 50,000 that analysts had penciled in. However, the market had been pricing in a stronger reading given the upbeat lead indicators from earlier in the week. ADP private payrolls, initial jobless claims and the unemployment sub component of the ISM service sector PMI had all posted stronger than expected readings.
The headline figure for the December report was also revised sharply lower to -227,000 job cuts, down from -140,000. Meanwhile the unemployment rate was a bright spot, dropping to 6.3%, down from 6.7%.