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Rupee ends substantially strong despite unexpected 50 bps rate hike

26 Jul 2011 Evaluate

Indian rupee gained substantial strength on Monday in tandem with its regional counterparts. The local currency which enticed strength in the morning deals supported by dollar weakness against other major currencies overseas appreciated further despite carnage at Dalal Street. A larger than expected 50 basis points rate hike by the RBI in its first quarter Review of Monetary Policy 2011-12 mainly sent the equity markets tumbling. Meanwhile, on global front, the dollar dropped to a record low against the Swiss franc as ongoing political wrangling about raising the US debt ceiling kept investors jittery about the possibility of a debt default. However, the debt jitters which slammed dollar mainly supported the upmove of the Euro and thereby the Indian currency.

Finally the rupee ended at 44.18, stronger by 22 paise from its previous close of 44.40 on Monday.It touched a high and low of 44.33 and 44.18 respectively. The Reserve Bank of India's reference rate for the dollar stood at 44.28 and for Euro it stood at 64.16 on July 26, 2011. While, the RBI's reference rate for the Yen stood at 56.73 and the reference rate for the Great Britain Pound (GBP) stood at 72.3654. The reference rates are based on 12 noon rates of a few select banks in Mumbai

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