The rupee was trading firmer at 71.3450 to the dollar in the evening session on Thursday. Earlier, the rupee gave up some of its earlier gains to trade at 71.5325 against the dollar in afternoon trading on Thursday.

The rupee hit a high of 71.44 at mid-session, soon after the RBI announced a 25 bps cut in the repo rate and a shift in stance to neutral from calibrated tightening to boost the economy.

The domestic unit depreciated 20 paise to 71.76 in early trade at the forex market ahead of the Reserve Bank of India’s interest rate decision.

The domestic currency has been trading in a narrow range in the last two trading sessions as investors were cautious ahead of the RBI’s Monetary Policy Committee outcome scheduled to be announced later in the day.

Forex traders said a positive opening in domestic equities, fresh foreign fund inflows and easing crude prices, however, capped losses for the domestic unit.

At the Interbank Foreign Exchange, the rupee opened on a weak note at 71.73, then fell further to 71.76 against the US dollar, showing a decline of 20 paise over its previous closing.

On Wednesday, the rupee had settled 1 paise higher at 71.56 against the US dollar. Foreign funds purchased shares worth Rs 694.97 crore on a net basis, and domestic institutional investors bought shares worth Rs 525.26 crore on Wednesday, provisional data showed.

The global benchmark, Brent crude oil was trading at $62.46 per barrel, lower by 0.32 per cent.

Both the Sensex and the Nifty were trading sharply lower in the early afternoon session after the RBI cut the repo rate and shifted its stance to neutral from calibrated tightening, to boost the economy.

The domestic equity market opened on a higher note. The 30-share BSE benchmark Sensex traded at 37,081.76, up 106.55 points in early trade; and the wide-based Nifty was also trading up by 30.30 points at 11,092.75.

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