Indian rupee ended weaker on Tuesday as sentiments got hit with the Reserve Bank of India (RBI) governor Urjit Patel’s unexpected resignation from his post on Monday. The government and the RBI have been fighting for weeks over how much autonomy the RBI should have as the administration of Prime Minister Narendra Modi seeks to reduce curbs on lending and to gain access to the RBI’s surplus reserves. Sentiments also remain dampened after Moody’s Investors Service’s said that the independence of a country’s central bank is an important consideration while assessing a country’s institutional strength and any attempt by the government to curtail it would be credit negative. To a query on the sovereign rating impact of the developments around RBI, Moody’s said while the motivation for the RBI Governor’s resignation is unclear, the independence of a country’s central bank is an important consideration in their assessment of a sovereign’s institutional strength. Assembly poll results showed BJP losing power in Rajasthan and Chhattisgarh, while having a close finish in Madhya Pradesh, too dampened sentiments.
Finally, the rupee ended at 71.85, 53 paise weaker from its previous close of 71.32 on Monday. The currency touched a high and low of 72.42 and 71.67 respectively. The reference rate for the dollar stood at 71.92 and for Euro stood at 81.73 on December 11, 2018. While the reference rate for the Yen stood at 63.57, the reference rate for the Great Britain Pound (GBP) stood at 90.42.
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