BackRupee climbs on dollar inflows, data
Rupee climbs on dollar inflows, data
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Mumbai: The Indian rupee strengthened on Monday as pent-up dollar inflows and higher-than-expected growth in December industrial output raised hopes for stronger economic outlook.
The partially convertible rupee closed at Rs46.32/33 per dollar, 0.4% stronger than its Rs46.50/51 previous close last Thursday. Indian financial markets were shut on Friday for a local holiday.
Most Asian markets are shut on Monday and Tuesday for Lunar New Year holidays, while New York is closed on Monday for the Presidents Day holiday.
“We have had net inflows for the day I guess. With New York holiday, there was not any dollar demand as such," said R.K. Gurumurthy, head of treasury, at ING Vysya Bank.
India’s industrial output grew at its fastest pace on record in December, smashing forecasts, in further evidence of a strong economic recovery that could allow the government to follow the central bank in withdrawing stimulus.
Headline inflation in January accelerated to its fastest pace in more than a year, crossing the central bank’s end-March inflation forecast and putting more pressure on the bank to raise borrowing rates.
Dealers said there was exporter selling in late trade that also helped the rupee while a choppy sharemarket failed to provide any clear direction.
Shares fell 0.7%, with Bharti Airtel sliding to its lowest close in more than two months as investors gave a thumbs down to its $10.7 billion bid to buy Kuwaiti Zain’s African assets.
Traders would watch the dollar’s moves versus majors for direction on Tuesday in the absence of trading in most other regional peers.
Concerns over Greece and Dubai pressured the euro on Monday, with data showing currency speculators had added further bets the single European currency will fall against the dollar.
One-month offshore non-deliverable forward contracts were quoted at Rs46.30/40, little changed from the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX closed at Rs46.3550 and Rs46.3525 respectively, with the total traded volume on the two exchanges at a low $3.8 billion.
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