Reversing its three-session fall, the rupee bounced back to end higher against the US currency on Tuesday, on persistent selling of the American currency by exporters. Sentiments turned optimistic with Commerce and Industry Minister Piyush Goyal’s statement that use of artificial intelligence (AI) in different forms can help achieve the target of making India a $5 trillion economy in the coming years. Besides, positive trend in equity market supported the rupee. However, local unit cut most of its early gains, as some concern came with private report that India's government is likely to cut spending for the current fiscal year by as much as Rs 2 lakh crore ($27.82 billion) as it faces one of the biggest tax shortfalls in recent year. It added that Asia's third largest economy, which is growing at its slowest pace in over six years because of lack of private investment, could be hurt further if the government cuts spending. On the global front, Japanese yen pulled back from recent highs on Tuesday as investors became less anxious about the chances of an all-out conflict between the United States and Iran.
Finally, the rupee ended at 71.82, 11 paise stronger from its previous close of 71.93 on Monday. The currency touched a high and low of 71.87 and 71.68 respectively. The reference rate for the dollar stood at 72.09 and for Euro stood at 80.45 on January 6, 2020. While the reference rate for the Yen stood at 66.74, the reference rate for the Great Britain Pound (GBP) stood at 94.28.
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