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Indian rupee recovers from two weeks low on speculated RBI’s intervention; ends little changed

19 Dec 2013 Evaluate

Indian rupee, recovered most of its losses, and ended little changed on Thursday, after state-run banks sold American greenback, mostly on behalf of Reserve Bank of India (RBI). The Indian currency, in the early part of the session, fell to two weeks low on US Federal Reserve's move to taper its monetary stimulus, which is expected to incrementally reduce the inflows into emerging market’s currencies. Overnight on Wednesday, the US Federal Reserve announced that it will begin tapering its $85 billion stimulus programme by $10 billion a month, starting January 2014, if the US economy shows continued improvement. However, Indian currency’s losses were curtailed as dollar struggled to gain ground on Thursday after the Federal Reserve surprised markets by announcing its long-awaited first cut in the bond-buying programme, but couched it by promising interest rates would stay low for longer. 

Finally the rupee ended at 62.12, little changed from its previous close of 62.09 on Wednesday. The currency touched a high and low of 62.47 and 62.06 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 62.38 and for Euro stood at 85.29 on December 19, 2013. While, the RBI’s reference rate for the Yen stood at 59.98, the reference rate for the Great Britain Pound (GBP) stood at 102.1535. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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