Rupee recoups early losses to end stronger on Tuesday

Indian rupee recouped early losses and ended stronger against dollar on Tuesday on fresh selling of American currency by banks and exporters. Besides, the dollar's weakness against some other currencies overseas too supported the rupee. Some support came in with reports that the total collection from direct taxes stood at Rs 5.47 lakh crore as on February 13, which is 68.7% of the budget target for the fiscal. Though the government is likely to face a shortfall of Rs 40,000 crore in direct tax collection for the current fiscal, the shortfall would be made good as the indirect tax revenues are likely to overshoot budget target by a similar margin. However, losses in domestic equity market capped the rupee gains. Meanwhile, investors remained on the sidelines ahead of the Railway Budget on February 25 and government’s 2016/17 union budget, which is due on February 29. On the global front, yen gained largely on Tuesday as a recent rally in risky assets and crude oil fizzled out reviving demand for the safe-haven currency.

Finally, the rupee ended at 68.58, 3 paise stronger from its previous close of 68.61 on Monday. The currency touched a high and low of 68.68 and 68.45 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 68.64 and for Euro stood at 75.76 on February 23, 2016. While the RBI’s reference rate for the Yen stood at 61.12, the reference rate for the Great Britain Pound (GBP) stood at 96.8934. The reference rates are based on 12 noon rates of a few select banks in Mumbai.