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Rupee depreciates tailing weak Asian currency; dollar sales by exporters limit further slide

06 Jan 2014 Evaluate

Indian rupee, after getting a weak start, depreciated against dollar on Monday, however sharp slide of local unit was prevented on account dollar sales by exporters around ’62.40/$’ level. However, the undertone of the local currency remained downbeat for the entire trading session, hurt by a stronger dollar globally as well as caution ahead of key economic data i.e., India's main inflation gauge, WPI which is set to be released on January 15, 2014. However, release of macro-economic data, which continued flagging concerns over the speed at which the economy will recover from its decade-low pace of growth, leading to slide in local equity market, mainly deterred sentiments. Marking sixth consecutive monthly drop in output levels, activity in India's services sector shrank at a faster pace in December as new orders dwindled. The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fell to 46.7 in December from 47.2 in November. On the global front, yen rose on Monday, pulling away from recent five-year lows versus the dollar and the euro, as a fall in global stocks prompted traders to buy the safe-haven Japanese currency.

Finally the rupee ended at 62.33, weaker by 17 paise from its previous close of 62.16 on Friday. The currency touched a high and low of 62.46 and 62.24 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 62.32 and for Euro stood at 84.61 on January 6, 2014. While, the RBI’s reference rate for the Yen stood at 59.73, the reference rate for the Great Britain Pound (GBP) stood at 101.9911. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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