Indian rupee, shrugging off early set-back and snapping eight consecutive sessions’ depreciating streak, strengthened on Wednesday after Reserve Bank of India (RBI)’s governor Raghuram Rajan underscored that the current account deficit (CAD) in 2013-14 was estimated to be much lower at $56 billion than the quantum of $60 billion projected earlier and that there was no fundamental reason for rupee depreciation. The currency, which was bludgeoned on account of colossal losses of local equities, also drew some respite and recovered some of its lost ground after governor unveiled that Reserve Bank of India was weighing various options to contain exchange rate volatility and would come out with 'appropriate' steps in the future. Earlier, in the session, the currency took a knock on account of dismal set of macro-economic data and also speculations that U.S. Federal Reserve is on course to start reducing its stimulus as early as December, which taking dollar two-month high levels. On the macro-front, in a recipe of yet another rate hike, retail inflation measured in terms of consumer price index (CPI), entering double digits after seven months, rose to 10.09% in October, while in another blow, industrial production grew way below expectation at 2% in September.
Finally the rupee ended at 63.31, stronger by 41 paise from its previous close of 63.72 on Tuesday. The currency touched a high and low of 63.88 and 63.29 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 63.65 and for Euro it stood at 85.55 on November 13, 2013. While, the RBI’s reference rate for the Yen stood at 63.94, the reference rate for the Great Britain Pound (GBP) stood at 101.1661. The reference rates are based on 12 noon rates of a few select banks in Mumbai.
