Indian rupee extended its weakness for the second consecutive day on Thursday on increased demand for the American currency from importers and banks amid a bout of global risk aversion. The dollar has staged a broad-based rally against all its major trading partners on growing confidence of economic activity. The better-than-forecast US ISM non-manufacturing data, which increased the probability of a US Federal Reserve rate hike this year, also dampened the sentiments. Investors remained worried with International Monetary Fund’s (IMF’s) report that countries such as India have taken steps to reduce non-performing loans, but stressed that additional and more timely actions is needed. The IMF report also warned of rising medium-term risks and said global financial stability will now depend on how well financial institutions adapt to the new era of low growth and low interest rates. Also, sluggish trading in domestic equity market also impacted the domestic currency. All eyes are now on the European Central Bank, which will release the minutes of the latest policy meeting.
Finally, the rupee ended at 66.69, 18 paise weaker from its previous close of 66.51 on Wednesday. The currency touched a high and low of 66.70 and 66.56 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.63 and for Euro stood at 74.58 on October 6, 2016. While the RBI’s reference rate for the Yen stood at 64.34, the reference rate for the Great Britain Pound (GBP) stood at 84.67.The reference rates are based on 12 noon rates of a few select banks in Mumbai.
