Indian rupee depreciates by 7 paise to close at 66.84 against US dollar

By: | Updated: August 9, 2016 9:48 AM

Indian rupee depreciated by 7 paise to end at 66.84 against US dollar at Interbank Foreign Exchange (Forex) market on Monday after US dollar strengthened on stronger-than-expected US jobs growth data, which hinted at US Federal Reserve going for an interest rate hike next year.

Indian rupee vs US dollarIndian rupee depreciated by 7 paise to end at 66.84 against US dollar at Interbank Foreign Exchange (Forex) market.

Indian rupee depreciated by 7 paise to end at 66.84 against US dollar at Interbank Foreign Exchange (Forex) market on Monday after US dollar strengthened on stronger-than-expected US jobs growth data, which hinted at US Federal Reserve going for an interest rate hike next year.The local currency had opened 5 paise at 66.82 a dollar on Monday. It had closed at 66.77 level on Friday vs US dollar.

Domestic equity markets firm opening capped the rupee’s fall. Sensex advanced 104.22 points to end at 28,182.57, while NSE Nifty ended 28.20 points up at 8,711.35.

“There is no uniform trend of US Dollar globally. What we are witnessing are dispersed performance of currencies against US dollar depending on their micro structures. Indian Rupee is part or a select group of currencies which are benefiting from commodity tailwind, domestic policy action and attractive volatility adjusted interest rate carry. As a result Rupee has stopped playing tango to the weakness in Currencies like Yuan,” Anindya Banerjee, currency analyst, Kotak Securities said.

Banerjee further added that RBI would not be too comfortable seeing the Rupee gain too much on a relative basis so the central bank will keep on intervening in the domestic market to protect the US Dollar. As a result, we expect Rupee to eventually weaken towards 67:08/15 levels on spot.

Fresh demand from bankers and importers also helped the US dollar gain. It performed strong against other emerging market currencies on the jobs data. Non-farm payrolls rose by 255,000 jobs in July, while payroll growth in June was also revised up to 292,000, with hiring across sectors in the economy.

The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.74 and for Euro stood at 74.06 on August 8, 2016. While the RBI’s reference rate for the Yen stood at 65.40, the reference rate for the Great Britain Pound (GBP) stood at 87.27.

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