Indian rupee depreciated against dollar on Monday due to demand for the dollar from importers and banks. The fall in foreign exchange reserve also dampened the sentiments. Reserve Bank of India data showed that foreign exchange reserves declined by a huge $4.343 billion to $367.646 billion in the week to 7 October, as the country gears up for a massive dollar outflow due to billions of dollars in deposits nearing their maturity. Dollar strengthened against some other currencies overseas on the prospects of higher U.S. rates also weighed on the rupee. On the global front, yen held a three-week decline against the dollar as hedge funds trimmed bullish bets on the Japanese currency by the most since May and speculation increased that the Federal Reserve will raise interest rates this year.
Finally, the rupee ended at 66.89, 18 paise weaker from its previous close of 66.71 on Friday. The currency touched a high and low of 66.89 and 66.76 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.77 and for Euro stood at 73.36 on October 17, 2016. While the RBI’s reference rate for the Yen stood at 64.12, the reference rate for the Great Britain Pound (GBP) stood at 81.30.The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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