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Rupee slumps to a week low on Wednesday; faded hopes over QE3 play spoil-sport

05 Apr 2012 Evaluate

Indian rupee dropped the most in the week ending on Wednesday after Federal Reserve policymakers’ backed away from the need for another round of monetary stimulus in the backdrop on improving US economy outlook. Meanwhile, drop of local equities combined with the gloomy performance of regional counterparts, also weighed on the sentiment of local currency. Additionally, surge in dollar demand from local oil importers, the biggest buyers of dollars in the domestic currency market, ahead of extended weekend, also added to the downside. Further, even skid of euro to a three month low against American greenback, added to the blues for local unit. Euro slid to three-month low against the greenback as worries about the euro zone debt crisis rekindled after a poorly received Spanish government bond sales.

Finally the rupee ended at 51.12, weaker by 40 paise from its previous close of 50.72 on Tuesday. It has touched a high and low of 51.23 and 50.92 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 51.04 and for Euro it stood at Rs 67.39 on April 4, 2012. While, the RBI's reference rate for the Yen stood at 61.75 the reference rate for the Great Britain Pound (GBP) stood at 81.0874. The reference rates are based on 12 noon rates of a few select banks in Mumbai. 

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