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Rupee breaches 65 level after House passes food bill

27 Aug 2013 Evaluate

Indian rupee resumed its depreciation against greenback and was not very far from its record low of 65.56. The local currency dipped today on back of strong demand for the dollars from banks and importers, and sustained capital outflows. The sentiments were dampened after the lower house of Parliament approved a nearly $20 billion plan to provide cheap grain to the poor, which ultimately raised the concerns that country's fiscal deficit will blow out even further. However, Finance minister P.Chidambaram tried to console the situation by saying the rupee had overshot its true level and that the country was one of several emerging markets that were facing such pressures. Meanwhile, local equity market’s weakness also pressurized the domestic currency.

The partially convertible currency is currently trading at 65.44, weaker by 1 rupee 12 paise from its previous close of 64.32 on Monday. The currency has touched a high and low of 65.45 and 65.00 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 64.23 and for Euro it stood at 85.93 on August 26, 2013. While, the RBI’s reference rate for the Yen stood at 65.21, the reference rate for the Great Britain Pound (GBP) stood at 100.0070. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date1US$1GBP

August 26, 2013

64.23100.01

August 23, 2013

64.68

100.80
(RBI-Reference rate)

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