Indian rupee extended its weakness for the third consecutive day and hit over a one-week low against the US dollar on Monday, following continued dollar demand from banks and importers, coupled with heavy capital outflows. Sentiments remained down with the report that the monsoon weakened in most parts of the country this month, taking the season's total rainfall to 5 per cent below normal. September rainfall has been 19% lower than normal, except in east and northeast India, where it was 66% in excess. All other regions reported a deficit of 40%-50% this month. The heavy losses in domestic equity markets also weighed on the sentiment of the local currency. Investors remained cautious ahead of macroeconomic data, IIP for July and inflation data for August, which are scheduled to be released later in the day. On the global front, yen strengthened against dollar on Monday amid risk aversion, with hawkish comments from several Federal Reserve officials, a sell-off in bond and oil markets and renewed concerns about North Korea's nuclear test weighted on investor sentiment.
Finally the rupee ended at 66.92, weaker by 24 paise from its previous close of 66.68 on Friday. The currency touched a high and low of 66.96 and 66.85 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.90 and for Euro stood at 75.22 on September 12, 2016. While the RBI’s reference rate for the Yen stood at 65.26, the reference rate for the Great Britain Pound (GBP) stood at 88.77.The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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