Rupee recovers to close at 63.20/$

The RBI's move to ease cash conditions to support the rupee highlights the growing costs to the economy of stabilising the currency

August 23, 2013 9:18 IST | India Infoline News Service

The partially convertible rupee closed at 63.20 against the US dollar today after opening at 64.49/$.

The Indian currency plunged to a record low to 65.60 yesterday. The Reserve Bank of India's move to ease cash conditions after tightening them last month to support the rupee highlights the growing costs to the economy of stabilising the currency.

The BSE benchmark Sensex closed above the 18,000 mark yesterday, while the Nifty reconquered the 5,400 mark.

Recently, Deutsche Bank in a note said that the rupee could slide to 70 in a month or so, although some revival is expected by the end of the year.

The Rupee's sharp dip against the US dollar has made temptations for non-resident Indian (NRI) to buy property with realtors expecting an increase of 35% in business enquiries from the expatriates this year, reveals the associated chamber of commerce and industry of India (ASSOCHAM) recent findings.

Last week, RBI restricted how much Indian citizens and companies can invest abroad to reduce pressure on the rupee. The RBI also eased some of the rate limits for deposits targeted at non-resident Indians (NRIs).

The government has also raised import taxes on gold and silver in an attempt to narrow the burgeoning current account deficit. The import duty on gold was hiked to a record 10%, the third such increase in eight months, while duty on silver was hiked from 6% to 10%. The excise duty on gold bars was hiked to 9% from 7%.

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