Indian rupee depreciated to a week low level on Thursday on account of month end dollar demand from importers, while hefty losses of local equities also weighed on the sentiment of Indian currency. Sentiment also took a hit after RBI’s governor, Raghuram Rajan underscored that the back of inflation was required to be broken since it remains persistently higher and the Apex Bank would only be in comfortable position once the inflation is contained. These comments notably came ahead of monetary policy review on September 30, 2014. Meanwhile, worries of widening the trade and current account deficits after reports suggested of likelihood of more coal being imported by the country after cancellation of allocated coal blocks, added to pessimistic environment for second consecutive session. On the global front, euro hit a 22-month low against the dollar on Thursday on the prospect of diverging monetary policy between the Federal Reserve and the European Central Bank as rate differentials swing decisively in the greenback’s favour.
Finally, the rupee ended at 61.34, weaker by 37 paise from its previous close of 60.97 on Wednesday. The currency touched a high and low of 61.40 and 60.96 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 61.02 and for Euro stood at 77.84 on September 25, 2014. While, the RBI’s reference rate for the Yen stood at 55.87, the reference rate for the Great Britain Pound (GBP) stood 99.4272. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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