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Rupee ends substantially stronger against dollar

12 Jan 2021 Evaluate

Indian rupee ended substantially stronger on fresh selling of American currency by banks and exporters. Besides, healthy growth in the domestic equity market added to the rupee gains. Sentiments were perked up as ICRA Ratings in its latest report states it expects India’s real gross domestic product (GDP) to grow by 10.1 per cent in FY2022. However, it said the value of GDP in the next financial year will only mildly surpass the level that had been recorded in FY2020. Traders paid no heed as Reserve Bank of India (RBI) in its Financial Stability Report (FSR) has said that Banks’ gross non-performing assets may rise to 13.5 per cent by September 2021, from 7.5 per cent in September 2020 under the baseline scenario. The report said if the macroeconomic environment worsens into a severe stress scenario, the GNPA ratio may escalate to 14.8 per cent. On the global front; dollar edged higher across the board on Monday, extending a rebound from the near three-year low hit last week, taking strength from the recent spike in Treasury yields and the prospect of a growth boost from higher U.S. fiscal stimulus.

Finally, the rupee ended at 73.25, 15 paise stronger from its previous close of 73.40 on Monday. The currency touched a high and low of 73.44 and 73.24 respectively. The reference rate for the dollar stood at 73.45, and for Euro stood 89.49 on January 11, 2021. While the reference rate for the Yen stood at 70.52, the reference rate for the Great Britain Pound (GBP) stood at 99.18.

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