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Positive global sentiment boosts spirit of Indian rupee; WPI data acts a spoil sport

14 Nov 2011 Evaluate

Indian rupee commenced the fresh week on stronger note after regional stocks joined a worldwide rally in reaction to positive developments in the debt-stricken euro zone. Italy’s new leader- Mario Monti- on Sunday vowed to pull the debt-laden country back from the brink of a fiscal disaster that has threatened to tear apart the euro zone. Meanwhile, some support also came to the Indian currency after banks and exporters reduced their dollar positions on the back dollar weakness overseas. However, the local unit after strengthening below 50 mark in early deals, slipped back to the 50 mark level after local equities surrendered some ground post the release of October month’s WPI data. India's headline inflation was unchanged in October, worse than forecast and above the 9 percent mark for the eleventh straight month, complicating monetary policy for the Reserve Bank of India (RBI). The rate of inflation, based on monthly WPI, came much higher above the street estimates for the month of October 2011 at 9.73%, compared to 9.72% seen in the previous month and 9.08% during the corresponding month of the previous year. On the global front, euro gained ground on Monday as investors cheered progress on tackling Europe's debt problems, but traders remained wary as Italy prepares to test market appetite with a bond sale. Most traders remain unconvinced on whether new governments in Italy and Greece can win back investor confidence in their debt, and are looking to Italy's auction for near-term cues

The partially convertible currency is currently trading at 50.9, stronger by 3 paise from its previous close of 50.12 on Friday. It has touched a high and low of 50.09 and 49.92 respectively. The Reserve Bank of India's reference rate for the dollar stood at Rs 50.27 and for Euro it stood at 68.44 on November 11, 2011. While, the RBI's reference rate for the Yen stood at 64.83 and the reference rate for the Great Britain Pound (GBP) stood at 80.0776. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date1US$1GBP
November 09, 201149.7880.1051
November 08, 201149.38 79.1981
RBI Reference Rate

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