BS:Rupee pare gains as custodial banks sold dollars
The rupee pared losses in the afternoon trade as foreign banks sold dollar for their custodial clients which was trading at 62.65/ dollar at 2.23 pm, after hitting day’s low of 62.99/$.
The rupee opened weak today ahead of the crucial current account deficit (CAD) numbers for the April-June quarter which will be released after the market hours. On Friday, the rupee closed at 62.49/$.
The CAD account gap is expected to widen as compared to the previous quarter due to seasonal factors as exports are typically lower in the first quarter.
However, in the next few quarter the gap is likely to narrow as the government and the central bank has imposed various curbs on gold imports.
CAD touched a record high in 2012-13 as it touched 4.8% of GDP. Much higher than the comfort zone of Reserve Bank of India (RBI) which is 2.5%.
CAD has been higher for the last three years which has made the rupee weakened against the dollar.
