Taking the losses further for the second day, Indian rupee ended weaker against the dollar on Monday, on continued demand for the American unit coupled with its growing strength overseas. Traders remained concerned with report stating that even as monsoon is predicted to be normal this year, its uneven distribution could spike food prices, and inflation is likely to edge further. Besides, heavy losses in domestic equity markets also weighed on the sentiments of the local currency. However, losses remained capped as traders took some relief with economic affairs secretary Subhash Chandra Garg’s statement that India's growth trajectory continues to be stable with strong macroeconomic fundamentals, despite a continual rise in global oil prices and hardening bond yields. He also said that the fiscal deficit programme has been going on very smoothly and there has been no reason to believe that there will be any greater impact. On the global front, Sterling fell to its lowest in nearly five months on Monday as the dollar surged and investors prepared for data that could determine whether the Bank of England raises interest rates this year.
Finally, the rupee ended at 68.12, 12 paise weaker from its previous close of 68.00 on Friday. The currency touched a high and low of 68.16 and 68.02 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 68.08 and for Euro stood at 79.92 on May 21, 2018. While the RBI’s reference rate for the Yen stood at 61.15, the reference rate for the Great Britain Pound (GBP) stood at 91.40. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
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