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Rupee extends weakness paring early gains

31 May 2016 Evaluate

Indian rupee extended its weakness on Tuesday on some fresh capital outflow and also due to month-end dollar demand from importers. The domestic currency that had snapped its gaining streak in last session, made a positive start and gained some strength with some upmove in the local equity markets, but once the equity markets lost their momentum and slipped into red, the rupee followed the trend. Meanwhile, the Reserve Bank of India has capped weekly dollar purchases by oil refiners to pay off their debts to Iran in order to avoid pressure on the rupee. Traders remained a bit cautious ahead of the release of the key gross domestic product (GDP) and fiscal deficit data due later in the day. On the global front, the dollar continued hovering at two-month highs against the other major currencies, on expectations for a US rate hike next month. 

Finally, the rupee ended at 67.26, 9 paise weaker from its previous close at 67.17 on Monday. The currency touched a high and low of 67.31 and 67.10 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 67.20 and for Euro stood at 74.79 on May 31, 2016. While the RBI’s reference rate for the Yen stood at 60.40, the reference rate for the Great Britain Pound (GBP) stood at 98.6540. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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