Indian rupee closed with gains of 5 paise at 67.05 against the US dollar at the Interbank Foreign Exchange (Forex) market on Thursday following selling of American currency by exporters and banks. It opened at 67.08 level . The local currency had ended at 67.10 on Wednesday. Domestic equity markets failed to mainatin their early gains and closed lower on profit booking on F&O expiry day. Investors also turned cautious awaiting US Federal Reserve chair Janet Yellen’s speech, which could provide a clue on further interest rates hike or cut. Sensex ended at 27,835.91 by falling 224.03 points, while NSE Nifty ended below 8,600 level and settled at 8,592.20 by falling 58.10 points.
On Indian currency’s movement on Thursday, Anindya Banerjee, currency analyst, Kotak Securities said, “Dollar Rupee continues to languish in a low volatile environment, with not major triggers. We are eyeing an expansion in volatility over the next 4/6 weeks. A near term range of 66:80/67:00-67:30/50 remains in play.”
India rupee hovered in 67.0137 and 67.1087 range on Thursday. Dollar’s weakness against emerging market currencies also supported the rupee as world central bank heads gather in Jackson Hole, Wyoming for an annual meeting. Yellen is expected to offer new pointers on US monetary policy at the meeting. Recent hawkish statements by Fed officials including Vice Chairman Stanley Fischer and New York Fed President William Dudley have made some investors to hope that US interest rates will rise sooner rather than later, and some believe Yellen could echo their signals.
The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 67.08 and for Euro stood at 75.59 on August 25, 2016. While the RBI’s reference rate for the Yen stood at 66.84, the reference rate for the Great Britain Pound (GBP) stood at 88.65.