Indian rupee ended at 67.02 level against the US dollar at the Interbank Foreign Exchange (forex) market on Wednesday as fresh demand for American currency rose among importers and bankers amid policy outcome from US Federal Reserve.
Indian rupee ended at 67.02 level against the US dollar at the Interbank Foreign Exchange (forex) market on Wednesday as fresh demand for American currency rose among importers and bankers amid policy outcome from US Federal Reserve. The local unit had closed at 67.01 level on Tuesday, down 5 paise against the US dollar. Investors remained cautious ahead of policy decision of US Federal Reserve which is widely expected to leave interest rates unchanged for ninth-straight month. The local currency traded weak after Bank of Japan (BoJ) announced new monetary policy measures and said that it would expand its monetary base until inflation becomes stable above 2 per cent.
Anindya Banerjee, currency analyst, Kotak Securities said,” Indian Rupee traded weak post Bank of Japan policy as talk of reverse twist and yield curve targeting triggered sell off in Japanese govt bonds (JGBs). Sell off in JGBs spilled over into sell off in US Treasuries. Higher US yields caused a broader dollar rally. However, intervention from RBI capped gains in USD beyond 67:12 levels on spot. Tonight a surprise rate hike and or a hawkish Fed can be positive for USD. Larger range 66:60-67:50 on spot.”
Domestic equity markets also closed flat ahead of US Federal Reserve meet. Sensex ended 15.78 points down at 28,507.42, while NSE Nifty gained 1.25 points to close at 8,777.15.
Dollar strengthened against other other currencies globally, which also dampened the rupee sentiment. On the global front, yen weakened against dollar after the Bank of Japan decided to adopt a target for long-term interest rates in an overhaul of its massive monetary stimulus programme.
The local currency touched a high and low of 67.15 and 66.98 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 67.06 and for Euro stood at 74.69 on September 21, 2016. While the RBI’s reference rate for the Yen stood at 65.49, the reference rate for the Great Britain Pound (GBP) stood at 87.01.The reference rates are based on 12 noon rates of a few select banks in Mumbai.