Indian rupee depreciated against the US dollar on Monday, due to fresh demand for the American currency from banks and importers. The domestic currency remained weak since morning lacking any direction from the global markets as most of them remained closed on account of New Year. Sentiments remained dampened after India’s manufacturing PMI (purchase manager’s index) fell in December 2016 as demonetization took its toll on the economy. The headline seasonally adjusted Nikkei India Manufacturing PMI recorded below the crucial 50 threshold for the first time in 2016 during December. Some concern also came after Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report highlighted that banning of high value notes would lower growth rate due to economic slowdown in the third and fourth quarters of fiscal 2016-17. On the global front, dollar recovered from a two-week low against a basket of six major currencies on Monday, though trade was thin due to many markets being closed for the New Year holiday.
Finally, the rupee ended at 68.23, 31 paise weaker from its previous close of 67.92 on Friday. The currency touched a high and low of 68.23 and 67.93 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 68.02 and for Euro stood at 71.51 on January 2, 2017. While the RBI’s reference rate for the Yen stood at 58.19, the reference rate for the Great Britain Pound (GBP) stood at 83.96.The reference rates are based on 12 noon rates of a few select banks in Mumbai.
