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Rupee recovers from one-month low level to end tad stronger on RBI’s intervention

03 Jan 2014 Evaluate

Indian rupee, after opening weak and depreciating to one-month low level in intra-day trade, recovered all the lost ground by the close of trade and ended a bit stronger for the first time since the start of the New Year, on Friday on speculated RBI’s intervention, which allegedly brought dollars via state run-banks. Besides, recovery of local equity markets by the close of trade, also aided the currency’s recovery. The currency which was trading near two weeks low in early deals slipped to one month low level after  Prime Minister Manmohan Singh, pulling himself out of next PM’s race, just about listed his accomplishments and refrained from commenting on the proposal of increasing quota in subsidized LPG cylinders from 9 to 12 cylinders per household or for that matter clearing some air on reports of government holding back monthly diesel price hike, with its focus now clearly shifting to General Election, 2014. However, dollar’s strength overseas also limited further appreciation of Indian currency. On the global front, the dollar held steady near a two-week high versus a basket of currencies on Friday after positive US economic data reinforced expectations the Federal Reserve will continue to step away from its bond buying stimulus.

Finally the rupee ended at 62.16, stronger by 10 paise from its previous close of 62.26 on Thursday. The currency touched a high and low of 62.55 and 62.14 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 62.40 and for Euro stood at 85.19 on January 3, 2014. While, the RBI’s reference rate for the Yen stood at 59.90, the reference rate for the Great Britain Pound (GBP) stood at 102.5355. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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