Extending its weakness for the second straight day, Indian rupee depreciated against dollar on Tuesday on increased dollar demand from importers and banks. Further, as the greenback rebounded versus most Asian currencies as two US Federal Reserve officials supported the case for a hike in interest rates sooner rather than later, too supported rupee. The domestic currency was weaker from the very beginning. Besides the weak trend in the domestic equity market which somehow managed a positive close too hit the rupee sentiment. Sentiments remained subdued with the report that manufacturing activity in the country does not augur well for the economic growth in March and bank credit to domestic export sector has suffered due to fall in external demand. The yearly SBI Composite Index for March has declined below 50 and is at 49.5, compared with last month index of 51.3. Investors remained cautious ahead of a shortened week On the global front, euro declines against the U.S. dollar following several explosions in Brussels targeting the city’s airport and subway network.
Finally, the rupee ended at 66.72, 19 paise weaker from its previous close of 66.53 on Monday. The currency touched a high and low of 66.83 and 66.51 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.54 and for Euro stood at 74.89 on March 22, 2016. While the RBI’s reference rate for the Yen stood at 59.37, the reference rate for the Great Britain Pound (GBP) stood at 95.7526. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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