Indian rupee appreciates significantly against dollar

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01 Sep 2020 Evaluate

Reversing previous session drubbing, Indian rupee appreciated significantly against dollar on Tuesday, owing to dollar sale by exporters and banks and positive domestic equities. Traders took encouragement as India’s Manufacturing Purchasing Managers’ Index (PMI) for August has come in at 52, compared to 46 in July, signalling growth and rebound in production volumes for the first time in five months. For the first time since March, output expanded in the Indian manufacturing sector in August. Meanwhile, RBI announced new measures to maintain stability in the financial system, including two more tranches of special OMOs in its 'Operation Twist' and some easing of held-to-maturity (HTM) limits for bond holdings by banks. On the global front; pound scaled new eight-month highs on Tuesday above $1.34 as broad-based dollar weakness deepened in the wake of the Federal Reserve’s new policy framework that suggests U.S. interest rates will remain at record lows for the foreseeable future.

Finally, the rupee ended at 72.87, 73 paise strong from its previous close of 73.60 on Monday. The currency touched a high and low of 73.19 and 72 .75 respectively. The reference rate for the dollar stood at 73.59 and for Euro stood 87.57 on August 31, 2020. While the reference rate for the Yen stood at 69.67, the reference rate for the Great Britain Pound (GBP) stood at 98.12.