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Rupee depreciates on dollar buying

20 Jun 2017 Evaluate

Indian rupee depreciated against the US dollar on Tuesday, due to fresh demand for the American currency from banks and importers. Sentiments remained subdued with finance minister Arun Jaitley’s statement that the economy will have to face short-term challenges in implementing the biggest tax reforms since Independence. Some concern also came with Fitch Rating’s latest report that demonetisation of old Rs 500 and 1,000 notes had a material impact on spending as reflected in significant slowing of GDP growth in January-March and warned that the ongoing steep decline in investment could spell risks to growth potential. Besides, dollar’s strength against some currencies overseas also pushed down the rupee. On the global front, dollar hit a three-week high against a basket of currencies on Tuesday, after an influential Federal Reserve official said U.S. inflation would pick up as wages improved, bolstering bets on the Fed continuing to raise interest rates.

Finally, the rupee ended at 64.50, 8 paise weaker from its previous close of 64.42 on Monday. The currency touched a high and low of 64.53 and 64.41 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 64.46 and for Euro stood at 71.95 on June 20, 2017. While the RBI’s reference rate for the Yen stood at 57.80, the reference rate for the Great Britain Pound (GBP) stood at 82.15. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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