Snapping two-day winning streak, Indian rupee ended considerably weaker against the US dollar on Tuesday due to dollar demand from banks and importers. Rupee sentiment was hit by geopolitical tensions as Indian army strikes Pakistan military posts. Indian Army spokesperson Major General Ashok Narula said Pakistan Army has been supporting armed infiltration in Kashmir and targeted attacks have been carried out to put an end to such activities. Sentiments also remained subdued with India Ratings and Research’s (Ind-Ra) latest report indicating that Goods & Service Tax (GST) implementation will affect the working capital cycle of business in the initial phase owing to the lock up of input credit. Besides, weak trade in the domestic equity market too kept pressure on the domestic unit.
Finally, the rupee ended at 64.89, 34 paise weaker from its previous close of 64.55 on Monday. The currency touched a high and low of 64.89 and 64.62 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 64.77 and for Euro stood at 72.74 on May 23, 2017. While the RBI’s reference rate for the Yen stood at 58.37, the reference rate for the Great Britain Pound (GBP) stood at 84.03. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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