Rupee opens lower at 67.15 per dollar, down 5 paise.

The Indian rupee opened lower by five paise at 67.15/$ against US Dollar Wednesday as against the previous close of 67.10/$.

On the economy front, depreciation of the Indian currency, may not be the solution to deal with the losing momentum of the global economy.The Reserve Bank of India (RBI) Governor, Raghuram Rajan has warranted caution against devaluing rupee any further, which presently stands on an equitable level, as per reports.

The government announced the infusion of Rs.22,915 crore in 13 state-run lenders in a bid to boost the liquidity in the banking system. The capital infusion is part of the 'Indradhanush' plan under which state-run lenders will get Rs.70,000 crore over four years.

On Tuesday, the IMF slightly trimmed India's growth projections to 7.4% for 2016 and 2017, a drop of 0.1% from its previous forecast. The global lending agency also said that Brexit has resulted in global economic uncertainty.

Sterling is struggling (now at 1.3072 against greenback), as various surveys post Brexit vote reveal fall in confidence readings and projections for GDP growth are also lowered. The pessimism is now pervasive in Britain’s trading partners as well. In this regard, Germany’s ZEW Institute economic sentiment index tumbled to -6.8 in July from 19.2 in June. Nevertheless, Euro continues to trade steady, but Yen continues to weaken. In China, Yuan has managed some recovery, as several Chinese banks have been ordered to buy the domestic currency in order to stabilise the volatility after it slipped below 6.7 for the first time since the end of 2010.

The Indian currency ended higher by nine paise at 67.10/$. The local unit had hit a high of 67.21 and a low of 67.23. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 67.14 and for Euro stood at 74.34. The RBI’s reference rate for the Yen stood at 63.35; reference rate for the Great Britain Pound (GBP) stood at 88.7203.

Source : indiainfoline.com