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Rupee hits record closing low for second straight day

11 Sep 2018 Evaluate

Continuing its record closing low for the second straight day, Indian rupee ended considerably weaker against the Greenback on Tuesday, on fresh bouts of dollar demand from importers. Investors remained concerned with private report suggesting India’s economic growth is expected to moderate in the second half of this financial year after a strong first quarter, owing to tighter financial conditions, high oil prices and slowing global growth. It expects real GDP growth to slow to 7-7.3% in the second half of this fiscal from 8.2% in June 2018 quarter. Traders also reacted negatively to another private report highlighting that a depreciating currency will impact the economy adversely, as India imports around 83% of its crude oil requirement. A surge in the oil import bill can widen fiscal and current account deficits. Additionally, a firm dollar against some global currencies overseas along with sharp losses in the local equities also pressurized the sentiments. On the global front, the euro’s bounce fizzled on Tuesday as a broad dip in investor appetite for risk dragged the single currency lower, offsetting recent positive sentiment toward Italian government debt before a central bank meeting later this week.

Finally, the rupee ended at 72.69, 24 paise weaker from its previous close of 72.45 on Monday. The currency touched a high and low of 72.73 and 72.25 respectively. The reference rate for the dollar stood at 72.32 and for Euro stood at 84.07 on September 11, 2018. While the RBI’s reference rate for the Yen stood at 64.89, the reference rate for the Great Britain Pound (GBP) stood at 94.41. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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