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Rupee depreciates on Tuesday tracing weakness of other emerging Asian currencies

02 Sep 2014 Evaluate

Indian rupee was trading weak on Tuesday tracing weakness of other emerging Asian currencies after U.S. Labour Day holiday on Monday, however record high levels of local equities was keeping the downside of the currency under check. Further, sharply narrower Current Account Deficit (CAD) figures also prevented currency’s further depreciation. On the macro-front, India’s current account deficit (CAD) narrowed sharply to $7.8 billion (1.7% of GDP) in the first quarter of current fiscal from $21.8 billion (4.8% of GDP) in Q1FY14 on account of a contraction in trade deficit driven by both a rise in exports and a decline in imports. The Indian currency, after making a gap down start, was trading weak on increased demand for the American unit from importers amid firm cues from overseas. On the global front, euro languished at one-year lows early on Tuesday, following an aimless session overnight with market activity severely hampered by a holiday in the United States.

The partially convertible currency is currently trading at 60.62, weaker by 10 paise from its previous close of 60.52 on Monday. The currency has touched a high and low of 60.68 and 60.57 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 60.47 and for Euro stood at 79.39 on September 1, 2014. While, the RBI’s reference rate for the Yen stood at 58.06, the reference rate for the Great Britain Pound (GBP) stood at 100.4283. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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