Indian rupee breached the psychological 64/dollar mark to hit its lowest in three week on Tuesday, on persistent dollar demand and widening trade deficit. Trade deficit or difference between imports and exports was $14.88 billion in December, up about 41 percent year-on-year, as crude oil and gold import bill inflated. Investors even overlooked BMI Research’s report that two Asian economies - India and Indonesia - will see a pick-up in GDP growth in 2018, reaping benefits of the economic reforms. Besides, stronger dollar sentiment overseas along with fall in domestic equities also predominantly pressurised the local unit. On the global front, euro held steady on Tuesday, taking a breather after having rallied on the back of optimism about the euro zone‘s economic outlook and expectations for the European Central Bank to wind down its massive monetary stimulus.
Finally, the rupee ended at 64.03, 55 paise weaker from its previous close of 63.48 on Monday. The currency touched a high and low of 64.17 and 63.59 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at 63.76 and for Euro stood at 78.20 on January 16, 2018. While the RBI's reference rate for the Yen stood at 57.50, the reference rate for the Great Britain Pound (GBP) stood at 87.91. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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