Continuing its appreciation, the rupee was back to 65 levels, posting its biggest single-day gain to hit the 16-month high against the US dollar, due to selling of greenback by banks and exporters amid higher foreign inflows following BJP's resounding win in UP and positive IIP numbers. On Saturday, the BJP won an unexpected 312 out of 403 seats in the assembly elections of the India's largest state, raising expectations of continued political stability, smooth implementation of a proposed goods and services tax and reforms in areas such as labour laws and land acquisition. India's foreign exchange reserves rose by $1.2 billion to reach $364 billion as on February 17, 2017. Also, the Index of Industrial Production (IIP) rose to 2.7 per cent in January this year, with all three tracked sectors of mining, electricity and manufacturing registering positive growth. Traders overlooked the surge in WPI inflation numbers, which came at a 3 year high. The wholesale price inflation rose a more-than-expected 6.55 per cent year-on-year in February, compared with a 0.85 per cent fall a year ago and a provisional 5.25 per cent in January, mainly on rise in fuel and food prices. On the global front, the dollar inched up against a basket of currencies on Tuesday, as U.S. Treasury yields extended their rise ahead of an expected interest rate rise by the Federal Reserve.
Finally, the rupee ended at 65.82, 77 paise stronger from its previous close of 66.59 on Friday. The currency touched a high and low of 66.24 and 65.76 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.18 and for Euro stood at 70.43 on March 14, 2017. While the RBI’s reference rate for the Yen stood at 57.57, the reference rate for the Great Britain Pound (GBP) stood at 80.50.The reference rates are based on 12 noon rates of a few select banks in Mumbai.
