Rupee up on stocks rise, dollar drops overseas

Rupee up on stocks rise, dollar drops overseas
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First Published: Thu, Jan 22 2009. 10 31 AM IST
Updated: Thu, Jan 22 2009. 10 31 AM IST
Mumbai: The Indian rupee rebounded by nearly half a percent on Thursday, drawing strength from gains in the stock market and the dollar’s losses against some Asian currencies.
But investors were reluctant to build heavy positions ahead of the central bank’s policy review on Tuesday.
By 10:24am, the partially convertible rupee was at Rs48.91/92 per dollar, stronger than Wednesday’s close of Rs49.11/13 but is down 0.3% this week.
“Markets are taking it easy before the review and the regional stock and Asian FX cues are holding the rupee up,” said a senior dealer at a private bank.
Asian stocks clung to small gains on Thursday, with investors reassured after bank shares fuelled a Wall Street rally, but with global economic gloom still pervasive, safe-haven trades such as the yen and US Treasuries also rose.
Foreign fund flows have been a key factor determining the rupee’s fortunes in recent years. Foreigners have sold about $730 million worth of local shares this month, after having dumped more than $13 billion in 2008.
The rupee is down 0.4% this month, after having fallen 19.1% in 2008.
One-month offshore non-deliverable forward contracts were at Rs49.10/20, weaker than the spot rate.
A Reuters poll showed that a slight majority of analysts expect the central bank to hold its key lending rate steady at its policy review.
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First Published: Thu, Jan 22 2009. 10 31 AM IST
More Topics: Markets | India | Rupee | Dollar | Stocks |