Indian rupee breached the psychological 65/dollar mark to hit its lowest in thirteen month on Friday, on the back of consistent demand for the greenback from state-run banks and importers. The sentiments remained under pressure going by the minutes of the Monetary Policy Committee (MPC) which showed that an increase in interest rates might just be round the corner. The common concern is the impact on inflation of the proposed increase in minimum support prices, the fiscal situation, and the delayed impact of house rent allowances mandated by the pay panel. Some concern also came with International Monetary Fund (IMF) Chief Christine Lagarde’s statement that India is unlikely to carry on same speed of major economic reforms in an election year. Besides, stronger dollar sentiment overseas along with lackluster trade in the equity markets also predominantly pressurised the local unit. On the global front, dollar headed higher against most rival currencies on Friday, lifted by rising U.S. Treasury yields, which came on the back of a rally in commodity prices that has pushed up inflation expectations.
Finally, the rupee ended at 66.09, 29 paise weaker from its previous close of 65.80 on Thursday. The currency touched a high and low of 66.10 and 65.98 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.01 and for Euro stood at 81.45 on April 20, 2018. While the RBI’s reference rate for the Yen stood at 61.40, the reference rate for the Great Britain Pound (GBP) stood at 92.72. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
