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Business News/ Market / Stock-market-news/  Rupee strengthens to 60.93 per dollar on Fed rate hopes
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Rupee strengthens to 60.93 per dollar on Fed rate hopes

Although the rupee had touched a one-month low on Monday, it has fallen the least among major Asian currencies in September

The rupee has shed 0.69% this month, compared with falls of 0.88 to 2% for the Indonesian Rupiah, Korean Won, Malaysian Ringgit, Phillipine Peso and Thai Baht, according to Thomson Reuters data. Photo: Pradeep Gaur/Mint Premium
The rupee has shed 0.69% this month, compared with falls of 0.88 to 2% for the Indonesian Rupiah, Korean Won, Malaysian Ringgit, Phillipine Peso and Thai Baht, according to Thomson Reuters data. Photo: Pradeep Gaur/Mint

Mumbai: The rupee gained for a second consecutive session on Wednesday, tracking other Asian currencies, on expectations the US Federal Reserve would not move to hike interest rates at the end of its meeting later in the day.

Emerging markets were also helped by news that China’s central bank is injecting a combined 500 billion yuan ($81.35 billion) of liquidity into the country’s top banks to shore up a faltering economy.

Although the rupee had touched a one-month low on Monday, it has fallen the least among major Asian currencies in September, indicating improved resilience against fears of a wind-down in monetary stimulus by the US Fed.

The rupee has shed 0.69% this month, compared with falls of 0.88 to 2% for the Indonesian Rupiah, Korean Won, Malaysian Ringgit, Phillipine Peso and Thai Baht, according to Thomson Reuters data.

“Most expectations from the Fed meet have already been discounted at current levels. We see the rupee trading between 60.90 and 61.10 in the near term," said Vishweshwara M., assistant general manager, treasury, at Karnataka Bank in Mumbai.

The partially convertible rupee ended at 60.92/93 per dollar, compared with its close of 61.0550/0650 on Tuesday.

Foreign funds were spotted selling dollars earlier on Wednesday, having bought debt and shares worth nearly $3 billion in September so far, as per regulatory data.

The Fed is expected to offer fresh clues later in the day on when it plans to begin lifting interest rates and how quickly it will move. The Wall Street Journal’s Fed watcher Jon Hilsenrath said the central bank would keep the words “considerable time" in its policy statement, although it might qualify them.

Expectations over the Fed’s move also lifted Indian shares on Wednesday, with the 50-share NSE index Nifty closing 0.54% higher.

In the offshore non-deliverable forwards PNDF, the one-month contract was at 61.25/30 while the three-month contract was at 61.85/95. Reuters

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Published: 17 Sep 2014, 09:29 AM IST
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