Wednesday 21 August 2013

Rupee recovers from historic low, still ends weaker for the day

Indian rupee slumped to its historic low in Tuesday’s trade. It was some speculated RBI intervention that helped the domestic currency make some recovery otherwise the government and RBI looked helpless despite all their efforts to protect it. Rupee continued to bear the brunt of a large current account deficit and concern of stimulus tapering by the US Federal Reserve. Bond yields too surged with the 10-year yield nearing the 9.50 mark. However, there was some report of dollar selling by banks that helped the rupee to recover from its record low. There was weakness in most of the regional currencies before the announcement of US FOMC Minutes. In the global markets euro firmed up against dollar.

Finally the rupee ended at 63.25, weaker by 13 paise from its previous close of 63.13 on Monday. The currency has touched a high and low of 64.11 and 63.12 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 63.73 and for Euro it stood at 85.06 on August 20, 2013. While, the RBI’s reference rate for the Yen stood at 65.51, the reference rate for the Great Britain Pound (GBP) stood at 99.7875. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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