Mumbai: The rupee rose to its highest in more than seven weeks on Wednesday as fears of prolonged political uncertainty eased after the government won a confidence vote, while cheaper oil boosted sentiment.
At 10.20 a.m. the partially convertible rupee was at 42.32/33 per dollar, off an early high of 42.2950 but nearly 1% stronger than Tuesday’s close of 42.73/74.
The rupee bounced back with a vengeance and hit a seven-week high of 42.30 per dollar in the morning trade as the political uncertainty ended after the UPA government yesterday won the trust vote.
At the Interbank Foreign Exchange (Forex) market, the local currency resumed stronger at 42.49/51 a dollar against its previous close of 42.73/74 a dollar and later soared to 42.30/31 a dollar in late morning deals.
The rupee touched the intra-day high of 2June within minutes of resumption of trading on exporters dollar sales and expectations of increased capital inflows into equity markets following emergence of political stability.
Forex dealers said exporters resorted to dollar selling on fears that the Indian unit will strengthen further as the government will be able to push forward economic reforms in the absence of the Left parties.
They said strong equity markets and easing global oil prices also aided the rupee sentiment.
Indian benchmark Sensex was up 653 points at 1000 hours while Asian indices were trading higher by 1.25% to 3.6% in early trade.