Mumbai: The rupee rose to its highest in nearly two months on Thursday as exporters dumped dollars on a view that improving growth and robust foreign inflows would see the local unit strengthen in coming months.
The partially convertible rupee ended at 47.74/75 per dollar, off an intraday high of 47.70, its highest since 10 August, and 0.8% stronger than Tuesday’s close of 48.10/11.
The market was closed on Wednesday for the fiscal half-year book closing, and will be closed on Friday for a holiday. “The rupee is clearly on an upward trajectory and exporters want to sell dollars before this rise accelerates,” said a senior trader with a foreign bank.
“There were also accumulated dollar inflows due to the Wednesday holiday,” he added.
Traders said foreign buying of shares has lifted sentiment on the rupee. Foreign investors ought a net $3.8 billion of stocks in 1-29 September, taking inflows to more than $12 billion in 2009.
The flows have been a major driver for the rupee, which has rebounded from a record low of 52.2 in early March.
The Bombay Stock Exchange 30-share index, Sensex, rose 2.6% in the holiday-shortened week, with Thursday’s close its highest in more than 16 weeks.
One-month offshore non-deliverable forward contracts were quoting at 47.79/89, close to the onshore spot rate.
In the currency futures market, the most traded near-term contracts were at 47.8550 from 48.10 on Tuesday.