Weekly review: Rupee continues dizzying downward spiral for second-straight week

The rupee continued its dizzying downward spiral for the second-straight week and depreciated by a whopping 20 paise to end at 64.61 against the US currency.

Last Updated: Apr 22, 2017, 18:23 PM IST
Weekly review: Rupee continues dizzying downward spiral for second-straight week

New Delhi: The rupee continued its dizzying downward spiral for the second-straight week and depreciated by a whopping 20 paise to end at 64.61 against the US currency on sustained dollar demand from importers and corporates.

Trading along the line of resistance, the domestic currency largely moved in a narrow range in the midst of increasing impact of geopolitical threats on international currency markets.

Sluggish domestic equities along with continued selling by foreign investors mainly kept forex market sentiment little nervous.

A broadly weak greenback overseas on the other hand cushioned the fall.

Moreover, currency traders refrained from taking large positions ahead of Sunday's first round of a tight French presidential election.

Notwithstanding the impact of demonetisation, India returned to fiscal consolidation in the fiscal year 2016-17 largely due to the near-elimination of fuel subsidies and enhanced targeting of social benefits, the IMF said.

Foreign funds, meanwhile remained net sellers and pulled out USD 240.64 million from the Indian capital markets in last four days.

At the Interbank Foreign Exchange market, the local unit resumed a tad weak at 64.42 from last Friday's close of 64.41.

It kept descending under immense pressure and hit a low of 64.72 before recouping some early sharp losses to end at 64.61, revealing a loss of 20 paise, or 0.31 percent.

The domestic currency breifly touched a fresh one-month high of 64.29 on Monday.

In worldwide trade, the greenback regained some lost ground toward the fag-end trade after President Donald Trump said that he will be announcing the anticipated tax reform next week even as traders squared up positions ahead of the weekend and also release of first-quarter GDP data.

The dollar index ? a measure of the US currency against a basket of peers tumbled sharply to settle below the significant 100-mark at 99.66 from last weekend level of 100.49.

Meanwhile, the big news out of the U.K. This week came from Prime Minister Theresa May, in which she surprised the world by announcing that general elections will be held early, on June the 8th.

With PTI Inputs