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Building a meaningful momentum into the year-end, the rupee capped off a fabulous 2017 at a fresh four-month high of 63.87 against US dollar, seemingly unfazed by the prospect of Trump’s tax reforms and higher US interest rates.
The home currency ended the last trading week of the year with a healthy 18 paise jump after a brief consolidation.
This is the highest closing for the home currency since September 8 this year.
Frantic dollar unwinding by banks and exporters along with bullish local equities, further impending bout of strength. Besides, the prevailing bearish sentiment for the American unit proved to be a catalyst for the Indian rupee.
On year-over-year basis, the rupee appreciated by a whopping 405 paise, or 5.96 per cent, as compared to 2016-end level of 67.92 – putting it course for best year since 2010.
The year 2017 gave a massive edge to the Indian rupee when compared to its counterparts in other Asian and emerging economies, after a long six-year hiatus.
Also helped by dynamic capital inflows, the year undoubtedly marked an incredible comeback and a new beginning for the home currency even as the country witnessed a dramatic and eventual transition to a cash-less economy.
The Indian rupee wide swings during the year, plunging to its near all-time low of 68.35 in early January and hitting a fresh 2-year peak of 63.55 in August this year.
Meanwhile, the dollar sank to three-month lows against its major trading counterpart worldwide.
The greenback was also the worst G10 currency of 2017, dipping nearly 10 per cent over the year on trade-weighted basis.
Foreign institutional investors turned net buyers to the tune of USD 398.26 mln in domestic equities this week.
Additionally, country’s foreign exchange reserves surged by USD 3.53 billion to touch a new lifetime high of USD 404.921 billion in the week to December 22, aided by an increase in foreign currency assets, a RBI data showed.
In global commodity trade, Brent crude rose 1.1 per cent on Friday to USD66.87 a barrel for gains of 17 per cent for the year.
At the Interbank Foreign Exchange (forex) market, the rupee resumed modestly higher at 64.03 from last Friday’s close of 64.05.
But soon fell back to touch a fresh one-week low of 64.27 due to month-end demand for the American currency from importers and banks also some concerns over government’s additional borrowing plan.
However, overcoming the mid-week jolt, the domestic currency staged a spectacular rebound to hit a new four-month high of 63.87, revealing a smart gain of 18 paise, or 0.28 per cent.
The RBI fixed the reference rate for the USD at Rs 63.9273 and euro at Rs 76.3867, respectively.
With PTI Inputs