Mumbai: After a weak start, the rupee Tuesday recovered 10 paise to 72.41 against the US dollar amid volatility in early trade on fresh selling of the US currency by exporters and banks.
The rupee, after opening lower at 72.65 against the US dollar, quickly recovered to trade 10 paise higher at 72.41 at the Interbank Foreign Exchange.
Besides, dollar-selling by exporters and banks, fall in crude prices in the global market and weakness in the dollar against some currencies overseas amid US-China trade conflict, helped the domestic currency rebound, forex dealers said.
They said a higher opening in the equity market also supported the recovery in the rupee.
The domestic currency has declined around 6 percent since August and touched an all-time low of 72 level this week.
Compared to December 2017, the real effective depreciation of Indian rupee is between six and seven percent, said an IMF estimate on Tuesday.
Broadly since the beginning of the year, Indian rupee "has lost about 11 percent of its value in nominal terms vis a vis the US dollar", said IMF spokesperson Gerry Rice, responding to a question on the fall of the Indian currency in the last few months.
He, however, said the currencies of many of India's trading partners, including those in the emerging markets, too have depreciated against the dollar.
As a result, so far this year the real effective depreciation of the Indian rupee compared to December 2017 is, by our estimates, between six and seven percent, Rice said.
Observing that India is a relatively closed economy, he said the contribution of the net exports to growth in April to June quarter was again stronger than expected and the real depreciation of the rupee can be expected to reinforce this trend.
The BSE benchmark Sensex recovered by 74.68 points, or 0.19 percent, to 37,660.19 in opening trade.
Updated Date: Sep 18, 2018 09:41 AM