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Rupee weakens on higher demand for American currency from importers and banks

05 Oct 2016 Evaluate

Indian rupee weakened against the US dollar on Wednesday due to higher demand for the American currency from importers and banks. Further, strengthening dollar against other currencies overseas after upbeat macroeconomic data of a sharp bounce in the US manufacturing PMI in September weighed on the rupee. Indian rupee had closed higher in yesterday's trade after the Reserve Bank of India (RBI) surprisingly cut key interest rates by 25 basis points to 6.25 percent from 6.50 percent. On the global front, the dollar hovered near a two-month high against a basket of currencies, lifted by hawkish comments from a Federal Reserve officials strengthened expectations of a rate hike by the Fed within this year. The euro also extended its bounce following a report of potential changes to European Central Bank policy.

The partially convertible currency is currently trading at 66.54, weaker by 8 paise from its previous close of 66.46 on Tuesday. The currency touched a high and low of 66.6275 and 66.5275 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.55 and for Euro stood at 74.44 on October 4, 2016. While the RBI’s reference rate for the Yen stood at 65.08, the reference rate for the Great Britain Pound (GBP) stood at 85.32.The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date 1US$1GBP
October 04, 201666.555985.3180
October 03, 201666.533085.8675
(RBI-Reference Rate)

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