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Rupee weakens against dollar on foreign fund outflows

10 Sep 2015 Evaluate

Indian rupee was trading weak against dollar in early deals on Thursday on account of foreign fund outflows amid appreciation in the US currency overseas. Besides, fresh demand for the American unit from importers and a lower opening in the domestic equity market also put pressure on the rupee. Furthermore, concerns over downgrading of Brazil's rating to junk by Standard & Poor's and looming fears of a possible rate hike by the US Federal Reserve weighed heavy on the rupee. The faster-than-anticipated downgrade from investment grade is likely to jolt Brazilian financial markets later in the day and will increase borrowing costs for the government and Brazilian companies. It may put more pressure on currencies of commodity-driven emerging markets. Markets are now looking forward to US Federal Reserve policy meeting next week and RBI monetary policy review at the end of this month. On domestic cues, market participants now sense that slowing growth and moderating inflation may persuade the Reserve Bank of India to trim the interest rates at the September monetary policy meeting.

The partially convertible currency is currently trading at 66.60, weaker by 20 paise from its previous close of 66.40 on Wednesday. The currency touched a high and low of 66.7550 and 66.58 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.29 and for Euro stood at 73.98 on September 9, 2015. While, the RBI’s reference rate for the Yen stood at 55.07, the reference rate for the Great Britain Pound (GBP) stood at 101.8880. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date1US$1GBP
September 09, 201566.2945101.8880
September 08, 201566.6060102.3002

RBI-Reference Rate)

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