Snapping its three-day gaining streak, Indian rupee depreciated against dollar on Tuesday due to demand for American currency from banks and importers. Growing concerns over the Omicron variant of coronavirus and its impact on economic recovery weighed on the local unit. Traders shrugged off government data showing that India’s exports surged 37 percent on an annual basis to $37.29 billion in December 2021, the highest-ever monthly figure, on the back of healthy performance by sectors like engineering, textiles and chemicals, even as the trade deficit widened to $21.99 billion. Imports in December too rose by 38 per cent to $59.27 billion on account of an increase in oil imports, which soared 65.17 per cent to $15.9 billion. On the global front, dollar rose to a five-year high versus the yen on Tuesday, boosted by expectations of U.S. Federal Reserve rate hikes, as investors bet that the fast-spreading Omicron coronavirus variant would have limited economic impact.
Finally, the rupee ended 74.58 (Provisional), weaker by 29 paise from its previous close of 74.28 on Monday. The currency touched a high and low of 74.61 and 74.46 respectively.
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