MUMBAI, Dec 5:

The rupee on Friday gave up its initial gains and settled for the day lower by 5 paise at 89.94 (provisional) against US dollar, after the Reserve Bank cut key benchmark interest rate for the first time in six months.

Forex traders said the Reserve Bank of India’s (RBI) rate cut will weigh on the rupee, but RBI’s decision to purchase government bonds worth up to Rs 1 lakh crore through open market operations (OMO), combined with a USD 5 billion buy-sell swap, will support the local currency.

At the interbank foreign exchange market, the rupee opened at 89.85 against the US dollar and gained ground, touching 89.69 in morning deals, registering a 20-paise gain from its previous close.

After the RBI’s monetary policy announcement, the rupee lost ground and fell to 90.06 aga

See Full Page