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Rupee gains on first day in 2013; more upside seen

The partially convertible rupee closes at 54.68/69 per dollar versus its Monday close of 54.99/55
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First Published: Tue, Jan 01 2013. 09 27 AM IST
Traders broadly expect the rupee to gain in 2013 on the back of rate cut hopes, recently announced reforms and the likelihood of sustained dollar inflows on the back of loose monetary policy in most countries globally. Photo: Priyanka Parashar/Mint
Traders broadly expect the rupee to gain in 2013 on the back of rate cut hopes, recently announced reforms and the likelihood of sustained dollar inflows on the back of loose monetary policy in most countries globally. Photo: Priyanka Parashar/Mint
Updated: Tue, Jan 01 2013. 06 34 PM IST
Mumbai: The rupee started 2013 on a positive note tracking gains in local shares after US lawmakers agreed on a deal which would help avert the “fiscal cliff” but weak domestic data limited a sharper rise.
The Senate moved the US economy back from the edge of a “fiscal cliff” on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives.
India’s current account deficit widened to a record high of 5.4% of gross domestic product in the September quarter as export growth slowed more sharply than imports, data released just around market close on Monday showed.
Traders said going by the current data it was likely that the data for the October-December quarter would be even worse and it would be a key factor that forex participants would watch out for in the coming months.
Traders broadly expect the rupee to gain in 2013 on the back of rate cut hopes, recently announced reforms and the likelihood of sustained dollar inflows on the back of loose monetary policy in most countries globally.
“There are enough negatives like increasing imports and current account deficit, political instability, high fiscal deficit, high inflation, uncertainty in Europe,” said Samir Lodha, managing director at QuantArt Market Solutions.
“However, at this stage we feel moderately bullish about the rupee - assuming capital flows will weigh on current account deficit for a while. I see the rupee at around 53 levels by end-March”.
The partially convertible rupee closed at 54.68/69 per dollar versus its previous close of 54.99/55.00.
Traders said gains in the domestic share market also boosted sentiment for the rupee.
The BSE Sensex ended up 0.8% after the US deal.
In the offshore non-deliverable forwards, the one-month contract was at 54.96 while the three-month was at 55.50.
In currency futures, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 55.04 with total traded volume on the three exchanges at $2.99 billion. Reuters
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First Published: Tue, Jan 01 2013. 09 27 AM IST
More Topics: Rupee | dollar | exchange rate | currency |
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