Indian rupee climbs on outlook, waning cbank fears

Indian rupee climbs on outlook, waning cbank fears
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First Published: Tue, Dec 04 2007. 01 03 PM IST
Updated: Tue, Dec 04 2007. 01 03 PM IST
By Reuters
Mumbai: The Rupee climbed on 4 December as a large section of the market reversed long positions in the US currency on the view that the local unit would head back towards near-decade highs hit last month.
At 9:50 a.m (0420 GMT), the partially convertible rupee was at 39.435/445 per dollar, gaining from the previous close of 39.49/50.
It hit 39.16 last month, its highest since March 1998, but had since weakened under pressure from suspected central bank intervention and foreign selling of local stocks.
“With export growth continuing to be healthy, despite the rupee’s rise, there’s a chance the central bank may not intervene as heavily as it has in the past,” said the chief dealer with a corporate.
“That’s a large reason the market is shorting the dollar again,” the dealer added. Data showed India’s exports rose 35.7% in October from a year earlier to $13.30 billion (Rs52,425 crore), faster than in the previous month.
The central bank bought about $52 billion in a bid to temper the rupee’s ascent in the first nine months of the year and is widely believed to have played an active role in the rupee market in October and November as well.
The rupee’s 12% rise this year has dented exporter margins, and the government has noted this as an area of concern.
Data released on Monday, showed the trade deficit for October was $7.48 billion, compared with $6.92 billion in the same month a year earlier. The trade deficit was $44.41 billion in the first seven months of the fiscal year that began in April.
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First Published: Tue, Dec 04 2007. 01 03 PM IST
More Topics: Markets | India | Rupee | Central Bank | RBI |