Indian rupee ended marginally lower against US dollar on Wednesday, due to fresh demand for the American currency from banks and importers. Traders remained concerned with a private report that India’s economy will be hit hard by a combination of a global tariff war and the US Federal Reserve’s monetary tightening cycle. The report noted that a tariff war will reduce exports and lead to imported inflation, which will hurt Indian purchasing power and investments. Moreover, weakness in local stocks, which snapped a nine-day winning streak, also weighed on the sentiments. However, losses were limited as traders took some support with International Monetary Fund’s (IMF) statement that India’s GDP growth will accelerate in the current and next fiscal years as structural reforms raise potential output. GDP is forecast to grow 7.4% in the current fiscal from 6.7% in FY18 and accelerate further in FY20 to 7.8%. On the global front, dollar rose against yen on Wednesday amid improving risk appetite as concerns over trade friction between the U.S. and China and tensions in the Middle East subsided.
Finally, the rupee ended at 65.66, 2 paise weaker from its previous close of 65.64 on Tuesday. The currency touched a high and low of 65.78 and 65.59 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 65.68 and for Euro stood at 81.30 on April 18, 2018. While the RBI’s reference rate for the Yen stood at 61.21, the reference rate for the Great Britain Pound (GBP) stood at 93.98. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
