Indian Rupee Extends Slide On Increased Dollar Demand

Indian Rupee: Extends Slide On Increased Dollar Demand

The Indian rupee extended slide against the dollar in early trades on Friday, 22 April 2016 on increased demand for the American currency from importers and banks. A firm dollar against some global currencies overseas and a lower opening of the domestic equity market weighed. The domestic currency opened at Rs 66.49 against the dollar and dipped to a low of 66.57 so far during the day. In the spot market, the Indian unit was last seen trading at 66.5350. The rupee had dropped by 18 paise to end at 66.40 in yesterday`s trade on fresh demand for the US dollar from banks and importers despite weakness in the greenback overseas.

Domestic benchmark indices drifted lower in early trade on negative Asian stocks. At 9:21 IST, the Sensex was down 72.47 points or 0.28% at 25,807.91. The Nifty 50 index was currently down 21.30 points or 0.27% at 7,890.75.

In overseas markets, Asian markets were trading lower following overnight losses in US stocks. US stocks closed lower yesterday, 21 April 2016, as big declines in defensive sectors such as consumer staples, telecoms and utilities weighed on the main indexes. In Europe, the European Central Bank (ECB) yesterday, 21 April 2016 left official interest rates unchanged, as expected. The ECB left the interest rate on its main refinancing operations at 0%, the interest rate on its marginal lending facility at 0.25%, and the interest rate on its deposit facility at minus 0.4%. The announcement came after close of Indian market hours yesterday, 21 April 2016.

Meanwhile, the dollar turned higher against other currencies Thursday, after solid U.S. economic data sparked concerns that the Federal Reserve may raise interest rates in coming months.