USDINR closed at 72.51 against its open at 72.5200. Dollar ended up Monday on buying by foreign banks tracking a strong greenback amid caution due to ongoing US-China trade dispute.Sagging investors' sentiments also took a toll on local equity market and as overseas investors pulled out of Indian stocks. Adding to this, government measures to control rupee was very disappointing.
Also, disappointment over measures taken by the Government of India to control the depreciating rupee and widening current account deficit supported the rally in spot pair."The US-China trade woes along with disappointment over government's half hearted intervention is pushing the spot higher.
Measures announced by Government would not result in any immediate dollar supply and market may even consider the steps as sign of weak intervention. The other good thing is that there is an increased possibility of further interventions and hence rupee may see volatile swings.
In a bid to strengthen rupee and control current account deficit, Finance Minister Arun Jaitley announced five measures on Friday including tweaking norms related to External Commercial Borrowings and Masala Bonds after meeting with Prime Minster Narendra Modi and other key. officials of the Finance Ministry including Reserve Bank of India Governor Urjit Patel.
Sensex provisionally ends 524.81 points lower with 27 components in the red.