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Rupee ends considerably weaker against dollar

01 Jul 2021 Evaluate

Indian rupee ended considerably lower against dollar on Thursday on emergence of demand for the greenback from importers. Traders were worried as India's manufacturing sector activities contracted for the first time in 11 months in June as rise in coronavirus cases and strict containment measures adversely impacted demand as well as resulted in job losses. The seasonally-adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) declined to 48.1 in June from 50.8 in May. Some anxiety also came as India's external debt surged by $11.5 billion year-on-year to $570 billion as of March-end 2021, according to the Reserve Bank of India. The external debt to GDP ratio rose to 21.1 per cent as of March-end 2021 from 20.6 per cent a year ago. Meanwhile, country’s foreign exchange reserves in nominal terms, including the valuation effects, increased by $99.2 billion during the financial year 2020-21, compared to $64.9 billion in the preceding year, RBI data showed. On the global front, sterling fell on Thursday after Bank of England Governor Andrew Bailey warned against over-reaction to rising inflation in Britain.

Finally, the rupee ended 74.55, weaker by 22 paise from its previous close of 74.32 on Wednesday. The currency touched a high and low of 74.63 and 74.34 respectively.

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