Extending gains for the third straight session, Indian rupee ended marginally stronger against dollar on Friday, due to selling of greenback by banks and importers. Market participants got some comfort with the report indicating that money in circulation is rising again in India post-demonetisation period and at the current rate, currency-to-GDP ratio will reach about 9 per cent by March -- sufficient to stabilise economic activity. Some support also came with Union Finance Minister Arun Jaitley’s statement that the Indian economy is set to grow at a healthy rate in spite of the global economic slowdown in the coming years, because of important initiatives taken by the present NDA Government that are demonetisation, encouraging free trade and Goods and Services Tax (GST). Moreover, firm domestic equity market supported the rupee, but the dollar strengthened against some currencies overseas capped the gains. On the global front, yen came under downside pressure on Friday with Bank of Japan’s (BOJ) decision to increase purchases at regular JGB-buying operation was seen as a message that tapering of the central bank's asset-purchase program is off the table at is policy meeting on Tuesday next week.
Finally, the rupee ended at 68.03, 4 paise stronger from its previous close of 68.07 on Wednesday. The currency touched a high and low of 68.23 and 68.03 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 68.20 and for Euro stood at 72.74 on January 27, 2017. While the RBI’s reference rate for the Yen stood at 59.24, the reference rate for the Great Britain Pound (GBP) stood at 85.49.The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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