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Local currency rises to 10 week high ahead of monetary policy

23 Jan 2012 Evaluate

Indian rupee rose to a 10-week high against the U.S. currency on Monday, on suspected intervention from the central bank a day ahead of its monetary policy review. The consensus estimates are that the Indian central bank will keep both repo and reverse repo rates unchanged at 8.5% and 7.5% respectively however, there are some expectations of OMOs. Meanwhile local currency was also supported by dollar inflows that helped offset choppy local shares. However dollar demand from oil importers restricted the rupee gains. In the nearer term rupee will get triggers from Reserve Bank's action on interest rates, macro-economic growth indicators, upcoming assembly elections to state legislatures and the budget, apart from events unfolding in euro zone countries.

Finally the rupee ended at 50.10, stronger by 25 paise from its previous close of 50.35 on Friday. It has touched a high and a low of 50.3925 and 50.05 respectively. The Reserve Bank of India's reference rate for the dollar stood at Rs 50.24 and for Euro it stood at 64.78 on January 23, 2012. While, the RBI's reference rate for the Yen stood at 65.24 and the reference rate for the Great Britain Pound (GBP) stood at 78.1286. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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