India’s foreign exchange reserves climbed to $686 billion as of November 28, providing 11 months of import cover, RBI Governor Sanjay Malhotra said on Friday as the central bank announced a 25-basis point cut in the repo rate to 5.25%.
The announcement came amid a recovery in the rupee, which appreciated 20 paise to 89.69 against the US dollar in early trade ahead of the policy decision. The currency opened at 89.85 and strengthened through the morning session, extending Thursday’s rebound when it gained 26 paise from record-low levels to close at 89.89.
The rupee’s gains were supported by softer crude prices — with Brent trading at $63.12 per barrel — and improved domestic sentiment. Equity markets opened higher, with the Sensex up 53 points and the Nifty advancing 28 points, even as foreign institutional investors offloaded Rs 1,944 crore in equities on Thursday.
On the global front, the dollar index edged up to 90.03, while risk appetite strengthened after Fitch upgraded India’s FY26 growth forecast to 7.4%, citing improved consumption and the boost from GST reforms. The RBI also revised its full-year GDP projection upward to 7.3%, with higher estimates for Q3 and Q4.
The 25-basis point rate cut — the first since the August and October pauses — was in line with expectations that falling inflation has created additional space for monetary easing. The MPC said its priority remains supporting growth while maintaining rupee stability amid volatile global conditions.
Source Name : Economic Times