The Indian rupee strengthened on June 5 after the Reserve Bank of India (RBI) unveiled measures aimed at supporting the currency and attracting foreign investment. The move came alongside the central bank’s monetary policy announcement.
The rupee rose 11 paise to close at ₹85.63 against the US dollar, supported by RBI initiatives to encourage foreign capital inflows and improve liquidity in the foreign exchange market. Investors welcomed the measures, which are expected to strengthen confidence in India’s external sector.
Among the key announcements were steps to make investments in government securities more attractive for foreign investors and measures to facilitate additional dollar inflows into the country.
The RBI said the initiatives are aimed at reducing pressure on the rupee amid global economic uncertainty, volatile crude oil prices and fluctuating foreign fund flows. The currency has faced challenges in recent months due to external risks and geopolitical tensions.
RBI Governor Sanjay Malhotra said the central bank does not target any specific exchange rate but remains focused on preventing excessive volatility in the forex market. He reiterated that the rupee’s value will continue to be determined by market forces.
The central bank also cut the repo rate by 50 basis points to 5.50% and changed its policy stance to neutral. While announcing the policy, the RBI revised its inflation and growth projections for the current financial year.