Continuing its record closing low for the fifth straight day, Indian rupee ended considerably weaker against the Greenback on Tuesday, on fresh bouts of dollar demand from importers. Traders remained cautious with a private report highlighting that a sustained weakness in the rupee may push the Reserve Bank of India to further tighten monetary policy, perhaps as early as next month. Traders also took note of NITI Aayog Vice Chairman Rajiv Kumar’s statement that the revised mechanism introduced by former RBI governor Raghuram Rajan to identify NPAs stopped banks from issuing fresh credit, resulting in slowdown of the economy in post demonetisation period. On the global front, dollar extended gains across the board on Tuesday, as concerns about a possible escalation in trade conflict between the United States and China prompted investors to dump emerging market currencies.
Finally, the rupee ended at 71.57, 39 paise weaker from its previous close of 71.18 on Monday. The currency touched a high and low of 71.57 and 71.09 respectively. The reference rate for the dollar stood at 71.18 and for Euro stood at 82.49 on September 4, 2018. While the RBI’s reference rate for the Yen stood at 63.92, the reference rate for the Great Britain Pound (GBP) stood at 91.46. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
