Rupee rises on dollar sales

Rupee rises on dollar sales
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First Published: Wed, Feb 10 2010. 07 04 PM IST
Updated: Wed, Feb 10 2010. 07 04 PM IST
Mumbai: The rupee strengthened on Wednesday as exporters sold dollars to book profit, but further gains were capped by local share losses and decent dollar buying by importers and oil refiners.
The partially convertible rupee closed at 46.49/50 per dollar, off a high of 46.48, but still 0.4% stronger than its close of 46.66/67 on Tuesday.
“Stocks were mostly flat today, most of the regional indices were flat to slightly positive. We also had some flows and with a long weekend to come, some amount of exporter selling was seen today,” said RK Gurumurthy, head of treasury at ING Vysya Bank.
The rupee could rise to 46.40 levels on Thursday, he added.
Dealers said the easing of the external commercial borrowing norms by the central bank also helped sentiment.
The Reserve Bank of India said on Tuesday banks may allow changes in the repayment of foreign currency borrowings if the average maturity of such debt is maintained. It also said changes in the currency of borrowing may be allowed as long as the currency is freely convertible.
Indian shares snapped a three-day rise and fell 0.8% on Wednesday, weighed down by waning foreign appetite and worries about the health of some euro zone economies.
The Indonesian rupiah and the Philippine peso rose on Wednesday on expectations of a rescue package for debt-ridden Greece, but later shed most of their gains on profit taking. [EMRG/FRX]
“I would see this as a correction of a broader trend. Dollar is likely to be strong for some time now. I guess there is uncertainty in the markets,” Gurumurthy said.
“We have a federal budget to come later this month and the RBI’s (Reserve Bank of India) stance on monetary policy inspires little confidence in the short run,” he said.
The government will announce its 2010-11 budget on 26 February.
“The rupee should have gained much more today, considering the European stocks were up almost 2% and the euro too gained against the dollar. But there was decent oil buying today around 46.50 levels,” said Madhusudan Somani, head of foreign trading, at Yes Bank.
One-month offshore non-deliverable forward contracts closed at 46.49/59, marginally weaker than 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 46.51 and 46.52 respectively, with the total traded volume on the two exchanges at about $5.1 billion.
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First Published: Wed, Feb 10 2010. 07 04 PM IST
More Topics: Rupee | Currency | Dollar | Foreign Exchange | Markets |