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Rupee off all-time lows on Thursday as CAD narrows

By Religare
|

The Indian currency remained above the 60/USD mark on Thursday but definitely recovered from its all-time low levels and closed with a gain of 0.9 per cent against the US dollar at 60.18, as country's current account deficit (CAD) narrowed in the Jan-Mar quarter, easing concerns over financing of the deficit.

The government on Thursday decided to release the Current Account Deficit (CAD) data for the March quarter a day ahead of its scheduled release, which at 3.6 per cent of GDP showed improving external balance situation, giving a boost to the battered rupee.

 

The data showed that current account gap during Jan-Mar stood at USD 18.1 billion as compared to USD 21.7 billion during a year ago. The CAD for the full fiscal year ended March 2013 was USD 87.8 billion or 4.8 per cent of GDP, higher than 4.2 per cent in the preceding fiscal. The data was released a day ahead of the schedule and a day after rupee touched all-time low of 60.76 against the US dollar.

Meanwhile, rise in rupee and fall in CAD also helped equities witness a rally on Thursday. The Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex) gained 323.83 points to end at 18875.95.

The rupee's recovery on Thursday was also helped by weakness in US dollar globally. The Dollar index, which gauges the performance of US dollar against six major currencies, ended flat as the greenback came under pressure on disappointing US GDP data which highlighted the fact that Fed may not soon start tapering.

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Story first published: Friday, June 28, 2013, 9:20 [IST]
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