Mumbai: The rupee rose on Friday, helped by a stronger opening in the local share market which raised hopes of some capital inflows, but dollar demand from importers and oil firms may limit the rise.
At 11am, the partially convertible rupee was at Rs48.67/68 per dollar, off a high of Rs48.57 but still 0.3% stronger than Thursday’s close of Rs48.82/83. The rupee fell to a record low of Rs49.30 last week.
“Today the market is looking at the possibility of a stock market rally, it has opened stronger but we do not know. In today’s session Rs48.25 to rs49 should be the range,” a senior dealer with a private bank said.
“The broad range for the near term though is Rs47.50 to 49.0. If we see a considerable rally in global stocks and if some amount of global and local risk aversion comes down, then the rupee may see Rs47.50,” he said.
India’s main share index opened up 1.7%, but later turned negative as the market outlook stayed hazy with worries about a sharp global economic slowdown.
Foreign investors in the share market, a key driver of the local currency have been repatriating funds. Net outflows exceed $11 billion so far in 2008, after record net inflows of $17.4 billion last year.
The rupee has fallen more than 19% against the dollar in 2008, after rising more than 12% in 2007.