The rupee climbed the most in almost a month on Monday on speculation that the nation’s biggest initial share sale, which also opened on Monday, will attract overseas investment.
The currency ended a three-day decline as DLF Ltd, a Delhi-based real estate developer, is looking to raise as much as Rs9,630 crore. The sale, which will close on 14 June, may attract as much as $700 million (Rs2,870 crore) from global investors, said Agam Gupta, Mumbai-based head of currency and derivatives trading at Standard Chartered Plc.
“If the DLF sale gets oversubscribed, which is very much expected, the capital inflows would be even greater,” Gupta said. “Inflows will help the rupee rise. Today’s rupee gains also reflect the positive trend in the stock market.”
The rupee rose 0.8% to 40.8025 against the dollar as of 5pm on Monday in Mumbai. This is the biggest advance since 14 May and the most any currency has gained on Monday. The currency may rise to 40.65 this week as overseas investors bid for DLF shares, Gupta said.
The rupee also gained on speculation that exporters will take advantage of a slump in the currency last week to convert their foreign exchange earnings.