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Rupee depreciates against greenback on RBI’s hawkish outlook

03 May 2013 Evaluate

Indian rupee depreciated against greenback after central bank’s statement that the room to cut borrowing costs this year to support economic growth is limited because of inflation and a record current-account deficit. Meanwhile, the Reserve Bank of India (RBI) in its monetary policy review, delivered 25 basis points repo rate cut, which is already factored in, while keeping the Cash Reserve Ratio (CRR) unchanged. Increased demand for the dollar from banks and importers and weak local equities also pressurized the domestic currency.

The partially convertible currency is currently trading at 53.93, weaker by 11 paise from its previous close of 53.82 on Thursday. The currency touched a high and low of 54.06 and 53.93 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 53.73 and for Euro it stood at Rs 70.71 on May 02, 2013. While, the RBI’s reference rate for the Yen stood at 55.24, the reference rate for the Great Britain Pound (GBP) stood at 83.5426. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date

1US$

1GBP

May 2, 2013

53.73 83.5426

April 30, 2013

54.21 84.0015

(RBI-Reference rate)

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