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Rupee ends weaker as RBI maintains status quo on rates

02 Feb 2016 Evaluate

Indian rupee extending its weakness for the second straight day depreciated against dollar on Tuesday after the Central Bank in its monetary policy review opted to keep the policy repo rate unchanged on inflation concerns even as it emphasized that it continues to be accommodative. It has also left the cash reserve ratio of scheduled banks unchanged at 4.0 per cent. The reverse repo rate under the LAF will remain unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 7.75 per cent. Besides, demand for American currency from importers and losses in equity market also kept the rupee environment pessimistic. Investors failed to get relief with Core sector output returning to positive territory in December 2015 by registering a 0.9 per cent growth after shrinking (-)1.3 per cent in November last year. On the global front, yen rose on Tuesday as a fall in oil prices and Asian stock markets sent investors in search of traditional safe havens for capital.

Finally, the rupee ended at 67.98, 14 paise weaker from its previous close of 67.84 on Monday. The currency touched a high and low of 67.99 and 67.77 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 67.83 and for Euro stood at 73.93 on February 02, 2016. While the RBI’s reference rate for the Yen stood at 56.21, the reference rate for the Great Britain Pound (GBP) stood at 97.6131. The reference rates are based on 12 noon rates of a few select banks in Mumbai.    

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