Mumbai: The rupee rose to its highest level in almost 12 weeks on Wednesday, tracking other Asian currencies after a Chinese government economist called for a one-off revaluation of the yuan.
Zhang Bin from the top government think tank Chinese Academy of Social Sciences said China should increase the yuan’s exchange rate by 10% against the dollar and then allow an annual 3% movement in both directions.
The partially convertible rupee ended at 45.85/86 per dollar, its strongest since 15 October and about 0.9% higher than Tuesday’s close of 46.24/25.
“The rupee closely tracked the regional currencies. A flat stock market had lesser impact,” said a senior dealer with a foreign bank.
The BSE benchmark Sensex rose for the fourth straight day, but faced resistance after it hit a 22-month-high in early trade.
Last year, foreign portfolio buying of more than $17 billion of domestic stocks helped the rupee rise 12.2% from a record low of 52.2 in early March. The rupee gained 4.7% in 2009.
The onshore one-year dollar premium edged down for the third straight session to 116 points from around 131 points at close of last year, indicating the rupee may depreciate at a slower pace than anticipated before.
One-month offshore non-deliverable forward contracts ended at 45.78/88, little changed from the onshore spot rate.
In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were at 45.93 and 45.9325 respectively.