Indian rupee ended significantly lower against dollar on Monday, on account of sustained dollar demand from importers and banks. Sentiments were fragile as the wholesale price-based (WPI) inflation accelerated to a record high of 12.94 per cent in May, on rising prices of crude oil and manufactured goods. Low base effect also contributed to the spike in WPI inflation in May 2021. In May 2020, WPI inflation was at (-) 3.37 per cent. This is the fifth straight month of uptick seen in the wholesale price index (WPI)-based inflation. In April, 2021, WPI inflation hit double digit at 10.49 per cent. Adding more pessimism, former RBI Governor D Subbarao expressed concerns over ‘extreme unevenness’ in economic recovery and ‘sharpening inequalities’ between upper-income segments and lower-income households in the country, cautioning that the trend will hit growth prospects going forward. On the global front; dollar consolidated gains on Monday after posting its biggest weekly rise in six weeks as traders cut their bearish bets before a much-anticipated Federal Reserve meeting that might signal a change in the outlook for U.S. monetary policy.
Finally, the rupee ended 73.29, weaker by 22 paise from its previous close of 73.07 on Friday. The currency touched a high and low of 73.29 and 73.10 respectively.
