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Rupee drifts to lowest levels of more than two month

26 Mar 2012 Evaluate

The Indian rupee slipped to its weakest level of more than two months on Monday on the back of heavy dollar buying from oil and other importers. Huge fall in local shares and a weak euro further dragged the local currency. Investors were doubtful on central bank’s intervention in the forex market. Questions over the continuation of foreign fund inflows into Indian shares resurfaced, on uncertainty over short-term capital gains taxes for derivative products sold to foreign investors, denting the market sentiment. The euro is seen as an indicator of risk appetite and hence is closely tracked by local currency traders for directional cues on the dollar.

Finally the rupee ended at 51.26, weaker by 4 paise from its previous close of 51.22 on Thursday. It has touched a high and a low of 51.48 and 51.09 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 51.31 and for Euro it stood at Rs 67.9785 on March 26, 2012. While, the RBI's reference rate for the Yen stood at 62.13 the reference rate for the Great Britain Pound (GBP) stood at 81.3658. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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