The rupee erased its initial losses and was trading at 61.53 against the dollar at 11.09 a.m. local time.
After opening weak by 14 paise at 61.67 per dollar against the previous close of 61.53, the domestic unit gained strength soon after the RBI second quarter monetary policy review announcement.
The central bank has raised the repo rate by 25 bps to 7.75 per cent and cut the MSF rate by 25 bps to 8.75 per cent. But it has left the cash reserve ratio unchanged at 4 per cent.
Citing urgency to anchor inflationary expectations, RBI had already hinted at hiking the key interest rate in its report on macroeconomic and monetary developments released on Monday, making investors cautious.
RBI study
On Monday, the RBI study of professional forecasters said that the average WPI inflation will climb to 6 per cent from the earlier median expectation of 5.3 per cent. But it has reduced the growth projection for the current fiscal to 4.8 per cent from 5.7 per cent earlier.
The 7.16 per cent government security maturing in 2023 opened higher at Rs 90.56 from Rs 90.50 previously, while its yield rose to 8.69 per cent from 8.66 per cent.
The overnight call money rate opened higher at 9.05 per cent from the previous close of 8.95 per cent.
After opening weak by 14 paise at 61.67 per dollar against the previous close of 61.53, the domestic unit gained strength soon after the RBI second quarter monetary policy review announcement.
The central bank has raised the repo rate by 25 bps to 7.75 per cent and cut the MSF rate by 25 bps to 8.75 per cent. But it has left the cash reserve ratio unchanged at 4 per cent.
Citing urgency to anchor inflationary expectations, RBI had already hinted at hiking the key interest rate in its report on macroeconomic and monetary developments released on Monday, making investors cautious.
RBI study
On Monday, the RBI study of professional forecasters said that the average WPI inflation will climb to 6 per cent from the earlier median expectation of 5.3 per cent. But it has reduced the growth projection for the current fiscal to 4.8 per cent from 5.7 per cent earlier.
The 7.16 per cent government security maturing in 2023 opened higher at Rs 90.56 from Rs 90.50 previously, while its yield rose to 8.69 per cent from 8.66 per cent.
The overnight call money rate opened higher at 9.05 per cent from the previous close of 8.95 per cent.
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