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Indian rupee ends firm amid strong gains in equity markets

03 Jan 2012 Evaluate

Indian rupee managed to hold gains on Tuesday amid strong gains in the equity markets which found support from data showing sharp increase in manufacturing activity in December, suggesting that momentum in the sector is not as weak as official numbers indicate. The Reserve Bank of India (RBI) has taken measures to prevent volatility in the foreign exchange market but weak domestic fundamentals have corroded the India growth story, prompting foreign investors to pull out, subsequently weakening the rupee. The pressure on the rupee is likely to continue, as balance of payment risks are unlikely to recede until global and local fundamentals improve, leading to sustained portfolio inflows.

Finally the rupee ended at 53.23, stronger by 7 paise from its previous close of 53.30 on Monday. It has touched a high and a low of 53.29 and 53.14 respectively. The Reserve Bank of India's reference rate for the dollar stood at Rs 53.2288 and for Euro it stood at 69.1265 on January 3, 2012. While, the RBI's reference rate for the Yen stood at 69.35 and the reference rate for the Great Britain Pound (GBP) stood at 82.8666. The reference rates are based on 12 noon rates of a few select banks in Mumbai. 

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