Indian rupee ended considerably weaker against the US dollar on Friday, on the back of consistent demand for the greenback from state-run banks and importers. Traders remained concerned with ICRA’s report highlighting that high quantum of non-performing asset (NPA) will restrict the overall bank credit growth to a moderate 7-8% in fiscal 2018-19, despite recapitalisation of public sector banks (PSBs) and private sector players upping their game with a 25 percent credit growth. Moreover, persistent fall in equity market together with dollar rose to a position of strength overseas added some extra pressure. Market participants shrugged off report that activity in India’s dominant service sector accelerated in April thanks to a pickup in new business that encouraged firms to hire at the fastest pace in seven years. The Nikkei/IHS Markit Services Purchasing Managers’ Index (PMI) rose to a three-month high at 51.4 in April from March’s 50.3, holding above the 50-mark that separates growth from contraction for a second month. On the global front, dollar rose against most major currencies on Friday, heading for a third straight week of gains as traders counted down to the closely watched U.S. jobs report.
Finally, the rupee ended at 66.87, 23 paise weaker from its previous close of 66.64 on Thursday. The currency touched a high and low of 66.92 and 66.62 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.76 and for Euro stood at 79.96 on May 4, 2018. While the RBI’s reference rate for the Yen stood at 61.17, the reference rate for the Great Britain Pound (GBP) stood at 90.58. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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