Mumbai, Jan 29 (PTI) The rupee struggled to hold ground against the US currency and ended lower by 3 paise at 63.58, halting its three-day rally even as the Economic Survey printed a rosy picture of India’s macroeconomic outlook. Also Read - Monsoon Session Day 2: Lok Sabha Passes Essential Commodities Bill to Raise Farmer Income, Boost Agri Sector | Highlights
The Economic Survey 2017-18 released just two days before the BJP government presents its fifth and final full-year Budget, predicted that India will re-establish itself as the world’s fastest growing major economy with GDP expanding by 7 -7.5 per cent in 2018-19, up from 6.75 per cent in the current fiscal. Also Read - 'Jammu And Kashmir to Reopen For Tourism Soon', Says J&K Administration
The domestic currency opened marginally weak at 63.60 as against the last Thursday’s closing of 63.55 at the Interbank Foreign Exchange (forex) market due to fresh dollar demand from banks and importers amid the greenback’s gains in overseas markets. Also Read - COVID-19: Centre Announces Guidelines For Unlock 2, Lockdown Till July 31 in Containment Zones
After touching a low of 63.62 in early trade, the domestic unit bounced back sharply to hit a session of 63.48 before retreating sharply.
It finally settled at 63.58, showing a loss of 3 paise against the greenback.
The RBI, meanwhile fixed the reference rate for the dollar at 63.5470 and for the euro at 78.8682.
The dollar index, which measures the greenback’s value against a basket of six major currencies, was up at 89.19 in early trade.
The week’s first trading day ahead of the Budget week was a generally quiet also impacted by month-end dollar demand amid a goodish US dollar rebound.
The economy is rebounding after cash shortages hurt businesses and consumers sentiment, though the survey warned against growing global risks such as rising oil prices and the possibility of sudden capital outflows.
Though, the home currency briefly traded in positive zone post Economic Survey report before sliding back despite a record breaking rally in local equities.
It moved in a tight range-bound trade and moved between 63.48 and 63.62 most part of the day.
On the international commodity front, crude prices turned little soft as soaring North American production was seen undermining efforts led by OPEC and Russia to tighten supplies.
Brent crude futures were trading lower at USD 69.86 a barrel in early Asian trading. It touched a three-year high of more than USD 71 last week.
The dollar, however managed to bounce against other major currencies in Asian trade largely supported by higher US Treasury yields.
Though, the greenback sentiment remained fragile after collapsing over 1.5 per cent last week sparked by concerns about US protectionism and tough trade talk amid conflicting comments from the Trump administration on US currency policy.
In the meantime, tracking country’s buoyant capital markets, Foreign investors pumped in a staggering USD 3 billion (nearly Rs 18,000 crore) this month so far on expectation of recovery in corporate earnings and attractive yields.
India’s forex reserves touched a new peak at USD 414.784 billion in the week to January 19, driven by strong inflows from overseas investors, according to the RBI data.
Meanwhile, after a brief pause, benchmark indices resumed their record-setting performance on the back of an upbeat growth forecast by the Economic Survey, potentially adding fresh impetus to the buying momentum ahead of Union Budget 2018.
The flagship BSE-Sensex jumped 233 points to close at 36,283.25, while Nifty rose 61 points at 11,130.40.
The policies and reforms measures implemented by the Modi government in the last three years to strength the bedrock of Indian economy have started gradually bearing fruit, a forex dealer commented.
The Indian economy made significant headway and has grown at a stronger 6.3 per cent pace in year-on-year terms in the second-quarter of 2017 rebounding after cash shortages hurt businesses and consumers sentiment.
In cross-currency trades, the rupee bounced back against the pound sterling after its recent steep fall and finished at 89.43 per pound as compared to 90.63 last weekend.
The home unit also recovered against the euro to close at 78.81 from 78.87, but remained weak against the Japanese yen to end at 58.47 per 100 yens from 58.32 earlier.
In forward market today, premium for dollar declined modestly due to mild receiving from exporters.
The benchmark six-month forward premium payable in June eased to 118.50-119.50 paise from 119-121 paise and the the far-forward December 2018 contract also softened to 256.50- 257.50 paise from 256-258 paise previously.
This is published unedited from the PTI feed.