Daily Currency Update - Indian Rupee - Dec 1, 2020 - Reliance Securities

The Indian Rupee depreciated against the U.S. Dollar on Friday possibly on the back of Greenback purchases likely on behalf of the central bank.

The Rupee ended at 74.05 to the dollar compared with 73.89 in the previous session.

However for the month of November, the currency ended pretty flat against the U.S. Dollar as persistent dollar bids likely for the central bank, offset the impact of robust foreign inflows in local equities and a broad dollar weakness.

On the data front, India's economy contracted at a slower pace in the fiscal second quarter, as New Delhi lifted most lockdown restrictions and policymakers ramped up stimulus measures to combat the coronavirus crisis.

Asia's third largest economy shrank 7.5% from a year earlier in July-September, the second quarter of contraction in a row that marks a so-called technical recession.

However, the pace of contraction slowed from the record 23.9% in the previous quarter and was lower than the median forecast of an 8.8% in a Reuters' poll for the quarter ended Sep. 30.

India's foreign exchange reserves rose for the eighth straight week to hit a fresh record high of $575.29 billion for the week ending Nov. 20, from $572.77 billion in the prior week. The rise was mainly due to an increase in foreign currency assets that stood at $533.10 billion, up from $530.27 billion in the previous week, according to the data from RBI.

India's fiscal deficit in the first seven months of the current financial year that started Apr. 1 totaled 9.53 trillion rupees, widening from 7.20 trillion rupees in the comparable year-earlier period, government data showed. Fiscal deficit for April-October was 119.7% of the government's estimate for this financial year.

Source : Equity Bulls

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