Rupee rises 17 paise to close at 79.23 against U.S. dollar

Brent crude futures rose 0.20% to $94.31 per barrel

The rupee appreciated by 17 paise to close at 79.23 (provisional) against the U.S. dollar on Friday after the Reserve Bank hiked interest rates by 50 basis points.

At the interbank foreign exchange market, the domestic currency opened at 79.15 per dollar. It hovered in a range of 78.94 to 79.29 during the session.

The domestic unit finally settled at 79.23, up 17 paise over its previous close of 79.40.

The Reserve Bank on Friday raised the key interest rate -- the third straight increase since May -- in an effort to cool stubbornly high inflation and defend the rupee.

The repurchase rate was raised by 50 basis points to lift the interest rate to the pre-pandemic level. The 5.40% repo rate was last seen in August 2019.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was up 0.25% at 105.95.

Forex traders said foreign fund inflows into capital markets and softening crude oil prices boosted the local currency.