Rupee snaps 2-day losing streak vs USD, up 19 paise

Snapping its two-day losing streak, the rupee today gained 19 paise to close at 66.47 a dollar on fresh selling of dollars by banks and exporters as the US currency weakened in global markets. The rupee resumed higher at 66.52 per dollar against the previous closing level of 66.66 per dollar at the Interbank Foreign Exchange (Forex) market and hovered in a range of 66.72 and 66.41 in day trade.

It settled at 66.47 per dollar, showing a gain of 19 paise or 0.29 per cent. The domestic currency had dropped by 45 paise or 0.68 per cent in the previous two days. The dollar index was down by 0.13 per cent against a basket of six currencies in late afternoon trade.

In the global market, the dollar touched nearly 18-month low against the Japanese currency as investors continued to be confident that Tokyo will not intervene in the market. Meanwhile, Finance Minister Arun Jaitley today said that the rupee does not face any “serious challenge” of depreciation and will find its own level after initial bouts of volatility.

Rupee is impacted by global events but eventually recovers, he said. His comments have come against the background of Barclays forecasting the rupee to drop to an unprecedented 69 a dollar by June 30 and weaken further to 70.50 by September 30 and end the year at 71.50 a dollar.

The rupee has seen volatility in recent months as it rallied 2.8 per cent in March after witnessing a low of 68.845 a dollar in February—the lowest since August 2013.

However, RBI governor Raghuram Rajan today said that a move towards an inflation target of 4 per cent will help contain the currency market volatility. “Our aim in the macro stabilisation is to make the exchange rate less and less an issue that investors have to worry about,” Rajan said.