Continuing gaining rally, Indian rupee strengthened marginally against dollar on Wednesday, owing to dollar sale by exporters and banks. Sentiments were positive as International Monetary Fund (IMF) has projected an impressive 11.5 percent growth rate for India in 2021, making the country the only major economy of the world to register a double-digit growth in 2021, amidst the coronavirus pandemic. However, upside remain capped as Reserve Bank data showing that overseas investment by domestic firms fell by over 42 per cent to $1.45 billion in December 2020. In the year-ago period, companies in India had invested $2.51 billion in their foreign firms (joint ventures / wholly-owned units). Meanwhile, RBI is examining the need to introduce a central bank digital currency (CBDC) in the country and is exploring ways to operationalise it, if necessary. On the global front, dollar edged higher against a basket of currencies on Wednesday as markets waited for comments from Federal Reserve Chair Jerome Powell, who is likely to renew a commitment to ultra-easy policy.
Finally, the rupee ended at 72.92, 2 paise stronger from its previous close of 72.94 on Monday. The currency touched a high and low of 72.94 and 72.78 respectively. The reference rate for the dollar stood at 72.92, and for Euro stood 88.81 on January 25, 2021. While the reference rate for the Yen stood at 70.32, the reference rate for the Great Britain Pound (GBP) stood at 100.02.
