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Rupee weakens on increased demand for US currency from importers and banks

05 Feb 2018 Evaluate

Indian rupee weakened against the US dollar on Monday amid increased demand for the US currency from importers and banks and sharp losses in equity markets. Besides, Indian markets are under pressure after the government breached its fiscal deficit target for fiscal year 2017 to 3.5% from earlier target of 3.2% and revised upward its deficit target for next fiscal year to 3.3% from 3% earlier. Also, introduction of long-term capital gains tax dampened sentiments. Rupee fell further by tracking losses in global equities and currencies markets after strong job data speculated that US Federal Reserve may boost interest rates next month. The next US Fed policy will start on 21 March. US Labor Department data showed non-farm payrolls rose 200,000 in January, exceeding the median estimate of economists for a 180,000 increase as the jobless rate held at a near 17-year low of 4.1%.

The partially convertible currency is currently trading at 64.10, weaker by 4 paise from its previous close of 64.06 on Friday. The currency touched a high and low of 64.2200 and 64.0300 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at 64.07 and for Euro stood at 80.03 on February 02, 2018. While the RBI's reference rate for the Yen stood at 58.36, the reference rate for the Great Britain Pound (GBP) stood at 91.33. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date1US$1GBP
February 02, 201864.078191.3369
February 01, 201863.611390.1754

(RBI-Reference Rate)

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