Indian rupee extending weakness for the second day declined on Wednesday, due to demand for American currency from banks and importers, amid weakness in Asian currencies. The domestic currency was weak from the very beginning. Investors who expected 50 basis points rate cut from Reserve Bank of India (RBI) started covering their short positions. On Tuesday, RBI governor Raghuram Rajan cut the benchmark repurchase rate to 6.5% from 6.75% and announced a change in its liquidity stance. Investors even overlooked the report of private sector activity in the country, which registered a significant uptrend and surged to a 37-month high in March. The Nikkei Services Business Activity index rose to 54.3 in March from 51.4 in February -- its joint-highest level since June 2014. On the global front, dollar edge near a 17-month low against the yen on Wednesday after taking a fresh knock overnight on comments by Japan's prime minister that suggested Tokyo was cautious about reining in the yen's rise.
Finally, the rupee ended at 66.66, 20 paise weaker from its previous close of 66.46 on Tuesday. The currency touched a high and low of 66.72 and 66.38 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.58 and for Euro stood at 75.62 on April 06, 2016. While the RBI’s reference rate for the Yen stood at 60.31, the reference rate for the Great Britain Pound (GBP) stood at 94.0918. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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