Mumbai: The rupee rose on Monday, following a higher-than-expected economic expansion in the September quarter and more than 2% rise in domestic markets also underpinned sentiment.
At 3 pm, the rupee was at 46.44/45 per dollar, up from Friday’s close of 46.64/65.
The GDP in the September quarter grew an annual 7.9% on high manufacturing.
“The rupee has rallied due to the global equities recovery and tracking weakness in the dollar index,” the chief dealer with a large private sector bank said, predicting a range of 46.25-46.45 during the session.
Most Asian currencies were stronger compared to the dollar.
The dollar edged down against other major currencies on Monday, pausing from sharp gains made last week after the United Arab Emirates offered emergency assistance to banks in Dubai, soothing the market fears about a looming debt default.
Indian shares opened up 0.65% and quickly extended gains to more than 2%. Market sentiment improved after many companies said they had only limited exposure to Dubai and on the rise in Asian stocks rose on hopes fallout from any debt default would be limited.
Foreign portfolio buying of about more than $15 billion of stocks this year has helped the rupee rise about 12.5% from a record low of 52.2 in early March.
Dubai’s debt crisis would not affect India much, but the government is keeping a close watch and will act to prevent any fallout, finance minister Pranab Mukherjee said on Saturday.