The Indian rupee appreciated 81 paise to close at 94.93 (provisional) against the US dollar on Friday after the Reserve Bank announced measures to support foreign capital inflows and strengthen forex liquidity. The announcements in the RBI policy boosted investor sentiments after the apex bank asserted that the country's forex reserves provide a sufficient buffer against external shocks. The Reserve Bank on Friday expectedly kept interest rates unchanged for the second time in a row as it weighed the impact of rising energy prices and supply disruptions caused by the West Asia crisis. The RBI kept its repo rate Steady at 5.25% amid uncertainty owing to US-Iran War. However, it expanded the Fully Accessible Route, or FAR, to include all new 15-year, 30-year and 40-year government security issuances. Due to this, the foreign investors will get wider access to longer-tenor Indian government bonds. This also opens up more room to invest in India's bond market. The central bank has also removed investment concentration limits for foreign portfolio investors under the general route. This gives FPIs greater flexibility while investing in Indian debt. The benchmark 10-year G sec yield slipped following this and broke well under 7% mark. Yields also turned lower as government has scrapped long-term capital gains tax on investments made by foreign institutional investors (FIIs) in government securities.

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