Indian rupee depreciated by 12 paise to close 67.18 against US dollar on Monday at the Interbank Foreign Exchange (Forex) market as demand for the American currency rose among importers and banks. The local currency had opened at 67.14 level and had closed at 67.06 level on Friday. Domestic equity markets that had a cautious opening in the morning following global cues closed higher, but it failed to boost rupee’s sentiments. Sensex advanced 120.41 points to end at 27,902.66, while Nifty closed 34.90 points up at 8,607.45.
Dollar strengthening against other emerging market currencies also supported to rupee’s fall. Dollar was firm after US Federal Reserve chair Janet Yellen indicated at a possible rate hike, but didn’t give a timeline for the same.
The currency hovered in the range of 67.1400 – 67.21. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 67.18 and for Euro stood at 75.18 on August 29, 2016. While the RBI’s reference rate for the Yen stood at 65.62, the reference rate for the Great Britain Pound (GBP) stood at 88.01.
“The initial weakness in the rupee trading was on account of the US Federal Reserve chair Janet Yellen announcing that a rate hike is possible this year. There was not much of policy buying in the dollar as supply continued unabated in the bond market and equity market. Volatility would pick up post US jobs data,” Anindya Banerjee, currency analyst, Kotak Securities.