Mumbai: The rupee on 4 July rallied to a new high in over nine years at 40.45/46 against the dollar on expectations of robust foreign fund inflows in the near future and lack of intervention by the central bank.
The Indian unit had hit an intra-day high of 40.28 on 28 May this year and the previous high was at 39.85 a dollar recorded on 13 May 1998.
It gained nine paise on 4 July 2007 over the previous close and garnered a total 55 paise in the last five straight sessions.
In active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency opened slightly better at 40.52/54 a dollar from the previous close of 40.54/55.
It remained stable in morning trade on expectation of intervention by the Reserve Bank of India (RBI) at 40.50 level.
But the apex bank did not come to rescue of exporters to support the dollar even at lower levels, ultimately helping the rupee’s surge.
Sustained bullish equity market also helped the rupee to rally further. The benchmark Sensex was up by over 73 points to close at new peak of 14,880.24, on sustained buying by foreign funds in heavy-weight stocks. Foreign Institutional Investors (FIIs) had pumped in over $1.4 billion on 30 June.
The rupee was so strong that even a weak dollar overseas and surge in global crude oil prices to above $71 a barrel could not stem its surge.