The Indian 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. The Reserve Bank of India's (RBI) rate cut weighs 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. Meanwhile, notable increase in local shares post rate cut limited sharp downside in the counter. The benchmark BSE Sensex surged 447.05 points, or 0.52 percent, to 85,712.37, after having snapped its four-day losing streak the previous day. The broader NSE Nifty index jumped 152.70 points, or 0.59 percent, to 26,186.45. 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.

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