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Rupee gains strength on gold, silver import duty hike

13 Aug 2013 Evaluate

Indian rupee that hovered near record low in early deals, appreciated substantially on Tuesday, after government hiked customs duty on gold and silver, as part of its latest effort to curb an outflow of dollars and support the local currency which fell to a record low last week. While, the government hiked refined gold bars for a third time in eight months to 10% from the earlier 8%, it also upped the import duty on silver to 10% from the earlier 6%, and the factory gate duty on gold bars to 9% from 7%. Additionally, sparkling gains of local equities and dollar sales by banks also lent support to the Indian currency, which in the early deals slumped on doubts about the government's latest plan to narrow the current account deficit. On the global front, dollar enjoyed a tentative recovery on Tuesday while the yen sagged on a media report Japanese Prime Minister Shinzo Abe is considering a corporate tax cut.

Finally the rupee ended at 61.18, stronger by 11 paise from its previous close of 61.29 on Monday. The currency touched a high and low of 61.66 and 60.97 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at Rs 61.43 and for Euro it stood at 81.77 on August 13, 2013. While, the RBI’s reference rate for the Yen stood at 63.09, the reference rate for the Great Britain Pound (GBP) stood at 95.0757. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

 

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