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Indian rupee depreciates against dollar amid lower trade

02 Jan 2012 Evaluate

The Indian rupee slipped against dollars amid low trading on Monday due to New Year, with many global markets closed for a holiday. The government's worsening fiscal deficit situation weighed down the stock market and triggered more foreign fund withdrawals, due to which local currency suffered. The central bank, which is suspected to have intervened by selling dollars last week, is likely to step in again if the rupee slips to around 53.50. RBI also allowed lenders to offer higher deposit rates for Indians living outside the country to attract funds lying overseas. Reducing overnight limits of banks to curb speculation and allowing hedging facilities of the NRE were also the steps taken on similar directions but rupee seemed to have overlooked them. 

Finally the rupee ended at 53.30, stronger by 26 paise from its previous close of 53.05 on Friday. It has touched a high and a low of 53.3450 and 53.1200 respectively. The Reserve Bank of India's reference rate for the dollar stood at Rs 53.2975 and for Euro it stood at 68.9095 on January 2, 2012. While, the RBI's reference rate for the Yen stood at 69.25 and the reference rate for the Great Britain Pound (GBP) stood at 82.6644. The reference rates are based on 12 noon rates of a few select banks in Mumbai. 

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