Indian rupee pared all of its gains and ends weaker against dollar, on the back of heavy capital outflows from the domestic equity market. Foreign portfolio investors (FPIs) have already pulled out of equities worth nearly $4 billion (over Rs 25,000 crore) so far in the December quarter, the worst since September 2015, amid uncertainty over US presidential election and prospects of hawkish US Federal Reserve’s policies. Sentiments remained subdued with the Prime Minister Narendra Modi’s top economic adviser Bibek Debroy’s statement that the negative shock from demonetisation will last until the end of March, though he also said that improved growth next year should fully compensate for the loss. Also, the minutes of the December 6 and 7 meeting of the Monetary Policy Committee (MPC) showed that most members think the withdrawal of high denomination notes could transiently interrupt industrial activity in the short term. However, dollar weakened against other currencies overseas capped the rupee fall. On the global front, dollar dipped for a second day as traders booked profits ahead of a batch of US data later in the day, though the greenback was still trading less than a per cent away from a 14-year high touched earlier in the week.
Finally, the rupee ended at 67.99, 8 paise weaker from its previous close of 67.91 on Wednesday. The currency touched a high and low of 68.03 and 67.84 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 67.91and for Euro stood at 70.86 on December 22, 2016. While the RBI’s reference rate for the Yen stood at 57.73, the reference rate for the Great Britain Pound (GBP) stood at 83.91.The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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