Indian rupee ended stronger against dollar on Monday, due to increased selling of the American currency by banks and exporters. Local currency got some support with the report that the implementation of GST is likely to be fiscally neutral and its impact on inflation is expected to be less than 20 basis points. Further, India has begun the process of dismantling some of the last remaining controls in the foreign direct investment (FDI) framework. The department of economic affairs (DEA) has floated a draft Cabinet note for inter-ministerial consultation to scrap the Foreign Investment Promotion Board (FIPB), in line with a plan announced by finance minister Arun Jaitley in his February 1 budget. Moreover, Foreign investors pumped in $3.4 billion in the capital markets so far this month, buoyed by expectations that BJP’s landslide poll victory is a precursor to “bold reformist policies” by the government. Besides, dollar weakness against some currencies overseas also added to the positive milieu of Indian currency. On the global front, sterling hit a three-week high against dollar on Monday, as a bringing-forward of expectations for when the Bank of England will hike interest rates drove investors to reconsider their record-high bets against the pound.
Finally, the rupee ended at 65.36, 11 paise stronger from its previous close of 65.47 on Friday. The currency touched a high and low of 65.47 and 65.30 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 65.38 and for Euro stood at 70.37 on March 20, 2017. While the RBI’s reference rate for the Yen stood at 58.06, the reference rate for the Great Britain Pound (GBP) stood at 81.01.The reference rates are based on 12 noon rates of a few select banks in Mumbai.