Rupee ended substantially weaker against dollar on Tuesday on account of continued dollar demand from importers and banks. Besides, selloff in domestic equity markets also weighed on the rupee sentiment. Traders were worried amid fresh scare over the possible severity of Omicron variant, after WHO warned it as a ‘very high’ global risk, with some evidence that it evades vaccine protection. Additional pressure came in as India's annual wholesale price-based inflation accelerated to 14.23% in November, its highest in at least 12 years, boosted by bigger hikes in prices of fuel and food. Traders paid no heed toward estimates by Export-import Bank of India showed that India’s merchandise exports are expected to grow by 51 per cent to about $303.98 billion in nine months ending December 2021 over the same period in 2020. On the global front, dollar scaled a one-week high on Tuesday versus a basket of major currencies, supported by expectations of a hawkish Federal Reserve meeting and continued uncertainty about the Omicron coronavirus variant.
Finally, the rupee ended 75.88 (Provisional), weaker by 10 paise from its previous close of 75.78 on Monday. The currency touched a high and low of 75.95 and 73.83 respectively.
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