Millennium Post

₹ slides by 14p to 64.52 per $ on RBI inflation rate forecast

Mumbai: The rupee on Wednesday weakened further by 14 paise to close at 64.52 against the US dollar after the Reserve Bank decided to keep rates unchanged and raised the inflation forecast.

Besides, heavy capital outflows in anticipation of rate hike by the US Federal Reserve and a strong dollar overseas largely ruled forex market sentiments.

Though the RBI's policy outcome was in line with wider expectations, upside risks emanating from high commodity prices against the backdrop of global headwinds added some pressure on the trading front.

Growing worries over higher government borrowings this fiscal year and apprehensions over fiscal slippages also weighed on trade.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 1,470.56 crore on Tuesday, as per provisional data.

Global crude prices slipped after a surprise rise in US inventories amid concerns about the outlook for economic growth.

Brent crude, an international benchmark, is trading at $62.22 a barrel in early Asian trade.

The Indian currency opened lower at 64.45 as compared to overnight level of 64.38 at the Interbank Foreign Exchange (forex) market here.

Maintaining its extreme bearish undertone, the local unit dropped to an intra-day low of 64.55 in mid afternoon deals, reacting to RBI policy outcome. It finally settled the day at 64.52, showing a loss of 14 paise, or 0.22 per cent.

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