Mumbai, 12 September Rupee rose to its highest in over a month today, closing in on a nine-year peak, as robust overseas investor inflows outweighed concerns about RBI intervention, dealers said.
At 9:50 a.m., the partially convertible rupee was at 40.49/50 per dollar, climbing from the previous close of 40.56/57, and moving within sight of a nine-year high of 40.20 hit in July.
“There isn’t a negative factor in sight at the moment, and there’s little the central bank can do,” said the chief dealer with a corporate, who expects the rupee to trade in a 40.55-40.45 range.
Dealers said capital inflows into the stock market, some slated for a share offering by Power Grid Corp of India, which aims to raise Rs30 billion ($740 million), had buoyed the local unit.
A rise in Asian stocks also boosted sentiment for the rupee, with dealers expecting strong investment flows into Indian shares.
The dollar hovered near a record low against the euro, hampered by expectations that the Federal Reserve would start cutting interest rates next week to counter the U.S. economy’s slowdown.
Still, the market remained cautious about making large bets on the rupee, wary about central bank intervention. Dealers said the Reserve Bank of India bought about $500 million in the previous session in a bid to stem the rupee’s rise.
The rupee has gained more than 9% this year to be Asia’s best performing currency.