Extending fall for the second day, Indian rupee depreciated against dollar on Monday, on increased demand for the greenback from importers amid rising crude prices. Traders remained cautious with India Ratings and Research’s latest report stating that the cumulative fiscal deficit of Indian states is expected to rise following the announcement of farm support packages ahead of national elections due by May. The aggregate budget deficit of Indian states is estimated to increase to 3.2 percent of gross domestic product (GDP) in the next financial year beginning April, compared with 2.8 percent estimated for the current year. However, local currency gave up most of its intraday session losses, as traders found some support with RBI’s report showing that the forex reserves continued its upward march and increased by $1.267 billion to $397.351 billion in the week to January 11, 2019, aided by a rise in core currency assets and value of gold. On the global front, dollar held near a two-week high on Monday, shrugging off concerns about weakening global growth and data showing China’s economy slowed sharply in 2018.
Finally, the rupee ended at 71.28, 9 paise weaker from its previous close of 71.19 on Friday. The currency touched a high and low of 71.53 and 71.13 respectively. The reference rate for the dollar stood at 71.37 and for Euro stood at 81.23 on January 21, 2019. While the reference rate for the Yen stood at 65.15, the reference rate for the Great Britain Pound (GBP) stood at 91.89.
