Extending its recovery against the US dollar to a second straight session, the rupee gained by 5 paise to close at 68.63 on Wednesday. Weakness in the dollar against a basket of currencies, amid prevailing fears of a trade war between the world's two largest economies, helped the rupee register some more recovery against the greenback, say analysts. The rupee had advanced sharply to 68.57 against the American currency earlier in the session however it could not sustain those levels.
Here are five things to know about the movement of the rupee against the US dollar:
1. The rupee traded in a range of 68.57-68.71 during Wednesday's session before settling at 68.63.
2. Renewed dollar demand from state-run oil marketing companies (OMCs) limited the quantum of recovery in the rupee against the US dollar. In the international market, crude oil prices dipped to $74 a barrel levels. Weakness in Brent futures, the global crude oil benchmark, came after China reported relatively weak import data.
However, the prices remained well supported by tightening supply, in view of declining US crude inventories and introduction of fresh US sanctions against Iran. Among members of the Organization of the Petroleum Exporting Countries, Iran is the third-largest producer.
3. The US government on Tuesday announced another round of tariffs on Chinese products. China said it was retaliating against US tariffs by slapping additional import duties of 25 per cent on $16 billion worth of US goods, including oil and diesel.
4. The International Monetary Fund (IMF) said India's economic growth is expected to rise to 7.3 per cent in FY19 and 7.5 per cent in FY20, on strengthening investment and robust private consumption.
5. The Reserve Bank of India - which follows a July-June financial year - said it has decided to pay a dividend of Rs. 50,000 crore to the government for the year ending June 30, 2018.
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