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Rupee appreciates against dollar on Friday
Dec-07-2018

Indian rupee ended higher against US dollar on Friday amid weakening American currency and firm performance in domestic equity markets. Traders took some comfort with Reserve Bank of India’s (RBI) deputy governor Viral Acharya’s statement that the RBI will continue to inject liquidity into the banking system through open market operation (OMO) purchases till the end of this fiscal. In the current financial year, the central bank has conducted OMO purchases to the tune of Rs 1.36 trillion, with over Rs 1 trillion of the infusion in the last three months. Traders remained optimistic with a report that the RBI is likely to cut key interest rates by 25 basis points either at the upcoming policy review in February or the one after that in April. Adding to the optimism, the Cabinet raised the government's contribution to National Pension Scheme (NPS) to 14% of basic salary from the current 10%. Some support also came with reports that the total wealth held by individuals in the country is expected to touch Rs 517.88 lakh crore by FY23, growing at an annual rate of 16.99%. Direct equity and mutual funds are expected to be the growth drivers of this northward trend, growing at a CAGR of 24.41% and 21.04%, respectively, over the next five years. 

Finally, the rupee ended at 70.67, 23 paise stronger from its previous close of 70.90 on Thursday. The currency touched a high and low of 70.74 and 70.45 respectively. The reference rate for the dollar stood at 70.56 and for Euro stood at 80.22 on December 07, 2018. While the reference rate for the Yen stood at 62.53, the reference rate for the Great Britain Pound (GBP) stood at 90.12.

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