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Rupee erases most of the early losses; ends marginally weaker against dollar

21 Jun 2017 Evaluate

Indian rupee, after making a weak start, gave away most of its losses and concluded marginally lower against dollar on Wednesday, due to fresh demand for the American currency from banks and importers. Sentiments remained downbeat with the inclusion of Chinese mainland stocks to the MSCI index, which could lead to hundreds of billions of dollars worth of share purchases, shrinking shares of other emerging markets, including India. Some concerns also came with CARE Ratings' latest report that the fiscal deficit estimate for 2017-18 is set to rise to 3.35% from present 3.24% of GDP, impacted by Rs 17,780 crore shortfall in non-tax revenue (NTR) target from telecom services. Besides, a fragile domestic equity market too affected the rupee, but dollar’s weakness against some currencies overseas kept the fall to a minimum. On the global front, dollar pulled back from one-month highs against a basket of currencies on Wednesday as a tumble in crude oil prices pushed down US yields, while the pound wobbled near a two-month low after Bank of England Governor Mark Carney shot down hopes of a British interest rate hike.

Finally, the rupee ended at 64.52, 2 paise weaker from its previous close of 64.50 on Tuesday. The currency touched a high and low of 64.67 and 64.49 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 64.60 and for Euro stood at 71.94 on June 21, 2017. While the RBI’s reference rate for the Yen stood at 58.07, the reference rate for the Great Britain Pound (GBP) stood at 81.53. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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