Indian rupee appreciated on Tuesday due to sustained selling of the US currency by exporters and banks. The domestic currency was in the positive terrain from the very beginning supported by the weak dollar index against other major currencies. Sentiments remained positive with SBI’s research report Ecowrap, which said that the Government is likely to make sweeping recast of direct taxes in the ensuing Budget to give a boost to the economy following demonetisation. Some support also came with the report that the government is likely to set fiscal deficit target in the range of 3.3-3.4 percent of GDP for the financial year 2017-18 in the upcoming Budget or will target a fiscal deficit of 3.5 percent of GDP -- same as that of 2016-17. On the global front, dollar steadied on Tuesday, recovering from a dip on fears that U.S. President Donald Trump's focus on protectionism over fiscal stimulus suggested his administration might be content to gain a competitive advantage through a weaker currency.
Finally, the rupee ended at 68.14, 7 paise stronger from its previous close of 68.21 on Monday. The currency touched a high and low of 68.20 and 68.07 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 68.15 and for Euro stood at 73.23 on January 24, 2017. While the RBI’s reference rate for the Yen stood at 60.27, the reference rate for the Great Britain Pound (GBP) stood at 85.14.The reference rates are based on 12 noon rates of a few select banks in Mumbai.
