Rupee rebounds 27 paise vs Dollars

  • Rupee rebounds 27 paise vs Dollars

Rupee rebounds 27 paise vs Dollars

Earlier this week, the rupee (INR) breached 68 level against the United States dollar (USD).

India's rupee rebounded by 27 paise to 67.80 per U.S. dollar (18.42 against dhiram) in early trade on Wednesday on fresh selling of the American currency by exporters and banks.

The RBI intervention is believed to have come after the rupee joined an emerging market currency selloff which prompted central banks from Indonesia to Turkey to intervene to stabilise their currencies. The currency has declined 4 per cent this quarter, thus becoming Asia's worst performer in 2018, news agency Bloomberg reported.

Rising global crude oil prices played a vital role in the weakening of the rupee. India's foreign exchange reserves have also fallen as much as $7 billion from their peak as the central bank without admitting to intervention has been doing so, said dealers.

After the uncertainty over the formation of government in Karnataka, domestic equities witnessed a largely muted reaction.

On Tuesday, the rupee weakened past 68-mark first time since January 2017, after Karnataka election results showed the Bharatiya Janata Party (BJP) will fall short of gaining a clear majority in Karnataka assembly election.

After posting strong gains against the U.S. dollar in 2017, the rupee has fallen sharply against the greenback this year.

Trade deficit widened to $13.72 billion in April 2018, from $13.69 billion in March, and compared with the $13.25 billion shortfall in the same month previous year, according to official data released on Tuesday.

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