Snapping its two-day losing streak, the Indian rupee today gained 19 paise to close at 66.47 a US dollar on fresh selling of dollars by banks and exporters as the US currency weakened in global markets.
The rupee resumed higher at 66.52 per dollar against the previous closing level of 66.66 per dollar at the Interbank Foreign Exchange (Forex) market and hovered in a range of 66.72 and 66.41 in day trade.
It settled at 66.47 per dollar, showing a gain of 19 paise or 0.29 per cent. The domestic currency had dropped by 45 paise or 0.68 per cent in the previous two days.
The dollar index was down by 0.13 per cent against a basket of six currencies in late afternoon trade.
In the global market, the dollar touched nearly 18-month low against the Japanese currency as investors continued to be confident that Tokyo will not intervene in the market.
Meanwhile, Finance Minister Arun Jaitley today said that the rupee does not face any “serious challenge” of depreciation and will find its own level after initial bouts of volatility.
Rupee is impacted by global events but eventually recovers, he said.
His comments have come against the background of Barclays forecasting the rupee to drop to an unprecedented 69 a dollar by June 30 and weaken further to 70.50 by September 30 and end the year at 71.50 a dollar.
The rupee has seen volatility in recent months as it rallied 2.8 per cent in March after witnessing a low of 68.845 a dollar in February — the lowest since August 2013.
“Our aim in the macro stabilisation is to make the exchange rate less and less an issue that investors have to worry about,” Rajan said. Meanwhile, the benchmark BSE Sensex closed lower by 215.21 points ,or 0.86 per cent to 24,685.42.
Oil prices climbed in Asia today after Kuwait said an agreement to freeze output during a producers’ meeting this month could still be reached despite conflicting statements by participants.
In forward market, premium for dollar moved down further on sustained receivings from exporters.
The benchmark six-month premium for September declined to 198-200 paise from 200-202 paise yesterday and far forward March 2017 contract also moved down to 392-394 paise from 395-397 paise.
The RBI fixed the reference rate for the dollar at 66.4698 and euro at 75.8952.
In cross-currency trades, the rupee ended lower against the pound sterling at 93.81 from 93.58 yesterday and also fell further against the euro to 75.81 from 75.55.
The rupee also dropped further against the yen to 61.35 per 100 yens from 60.38 previously.
Note: Forex and Money markets will remain closed tomorrow, April 8, on account of Gudi Padwa.