Indian rupee reversed gains and depreciated by 4 paise to close at 66.88 against the US dollar on Friday due to fresh demand of American currency among bankers and importers. The local currency has opened flat at 66.84. On Thursday, it had closed 13 paise down at 66.84 following dollar demand from banks and importers. Meanwhile, domestic equity markets closed higher following their global counterparts. Sensex closed 292 points up on to reclaim its crucial psychological level of 28000. Nifty surged 80 points to settle at 8,672.15.
The currency touched a high and low of 66.89 and 66.79 respectively.
Dollar firmed up against the other emerging market currencies that affected the rupee sentiment. On the global front, yen weakened against the dollar in the wake of a rise in US bond yields amid hawkish interest-rate comments from a senior Federal Reserve official.
“RBI was active in the market supporting the dollar and as a result of which the intraday volatility was really low. Inflows in equity market was strong, however, in the debt market it was tepid,” Anindya Banerjee, currency analyst, Kotak Securities said.
Rupee also failed to get any support after India Meteorological Department’s (IMD’s) stated that rainfall in India was 15 per cent above average in the week ended August 10. The weather office has retained its forecast for an above-average monsoon this year, boosting hopes of a rise in farm output and income after two years of drought.
The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.83 and for Euro stood at 74.46 on August 12, 2016. While, the RBI’s reference rate for the Yen stood at 65.44, the reference rate for the Great Britain Pound (GBP) stood at 86.63. The reference rates are based on 12 noon rates of a few select banks in Mumbai.