Rupee depreciates by 10 paise against US dollar

The currency touched a high and low of 66.58 and 66.15 respectively.

The Indian rupee opened lower by 10 paise  at 66.20/$ in early trade on Monday. Indian rupee can remain under pressure, considering the flow of subdued economic numbers during last week. In this respect, India’s industrial production growth came in below expectations, while consumer inflation rose to a four‐month high. In this respect, Industrial output growth grew 3.6% in September, down sharply from of 6.3% growth during the prior month. The slowdown is attributed to the sluggishness in the mining activity. Meanwhile, Consumer prices during October rose 5% on yoy basis after a 4.41% increase in September. Rising food prices (particularly pulses) and dilution of congenial base effect is leading to a spike in consumer price inflation.

In international markets, Euro remained on the defensive against the greenback, as ECB Chief Mario Draghi commented that further easing could not be ruled out considering deflationary trends. Bond purchases can continue beyond September 2016 if there is no sustained improvement in inflation levels. ECB will do a review of the monetary policy at the December meeting, conveying signals that something more is in the offing, possibly negative interest rates.

The rupee ended at 66.09, higher by 21 paise from its previous close of 66.31 on Tuesday. The currency touched a high and low of 66.58 and 66.15 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.13 and for Euro stood at 71.26 on November 13, 2015. While, the RBI’s reference rate for the Yen stood at 53.90, the reference rate for the Great Britain Pound (GBP) stood at 100.5511.