Indian rupee breaching 68 level mark ended weaker against dollar on Wednesday due to demand for dollar from banks and importers amid capital outflows from the local equity market. Sentiments weakened further with Moody’s Investors Service’s report that RBI’s target to bring down retail inflation at 5 per cent by March 2017 will face some risks from monsoon uncertainty and execution of seventh Pay Panel recommendations, while macro-economic factors will be critical for sustaining growth. Investors failed to get solace with the better-than-expected India’s services activity data. Nikkei/Markit Services Purchasing Managers' Index (PMI) surged to 54.3 in January from December's 53.6, marking a seventh month above the 50-level that separates growth from contraction. On the global front, yen fell sharply against the dollar after the Bank of Japan set the country’s first-ever negative interest rate and signaled that further cuts were possible.
Finally, the rupee ended at 68.07, 9 paise weaker from its previous close of 67.98 on Tuesday. The currency touched a high and low of 68.26 and 68.03 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 68.18 and for Euro stood at 74.45 on February 03, 2016. While the RBI’s reference rate for the Yen stood at 56.98, the reference rate for the Great Britain Pound (GBP) stood at 98.3192. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
