Rupee at four-day high, strike hits volumes

Rupee at four-day high, strike hits volumes
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First Published: Fri, Jan 25 2008. 02 15 PM IST
Updated: Fri, Jan 25 2008. 02 15 PM IST
Mumbai: The rupee rose to its strongest level in four sessions on Friday, lifted by gains in Asian currencies, but dealers were circumspect about taking large bets given this week’s brutal stock sell-off.
At 9:19 a.m. (0349 GMT), the partially convertible rupee was at 39.36, stronger than Wednesday’s close of 39.45/46. Volumes were hit by a strike affecting state-run banks, the biggest players in the currency and bond markets.
As the rupee moved within sight of a 10-year high of 39.16 hit in November, traders knew the risk of intervention increased.
“Volumes are quite thin and this is central bank territory. There are not many fresh triggers before the policy meeting next Tuesday,” said a local dealer at a foreign bank.
The central bank bought $72.1 billion in intervention the first 11 months of 2007 and dealers said it has been active since then in trying to keep the rupee lower.
“Oil-led demand may creep in at current levels and the stock market opening is key,” the trader said.
Foreigners sold $3.2 billion of shares in the six sessions to Wednesday, including $620 million on Wednesday when the market rose 5.2 percent. The stock market fell 2.1 percent on Thursday.
Seven out of 13 analysts polled by Reuters on Thursday forecast the Reserve Bank of India would cut its repo rate by a quarter percentage point to 7.5 percent on 29 January. The others forecast no change.
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First Published: Fri, Jan 25 2008. 02 15 PM IST
More Topics: Markets | India | Rupee | Dollar | Money Matters |