Mumbai: The rupee appreciated against the dollar on 11 September and ended at a five-week high of 40.56/57 driven by expectations of strong capital inflows and weak dollar overseas.
The Interbank Foreign Exchange (forex) market also saw exporters’ dollar selling at the current level in fairly active trade during the day.
The rupee moved in a range of 40.54 and 40.64 after resuming firm at 40.55/56 per dollar from the last close of 40.67/68.
Traders expected heavy inflows from the initial public offer by a government-owned PowerGrid Corp of India, which opened 10 September, forex dealers said.
Exporters were seen selling dollar in view of a sharp surge in the rupee, which has gained 41 paise or 1% in five days from 5 September onwards, they added.
Meanwhile, the rupee drew support during opening session from strong equity markets, which later lost their gains.
The BSE benchmark Sensex lost 54.06 points and closed at 15,542.77, while the broad-based NSE’s Nifty ended with a loss of 10.80 points at 4,497.05.
FII activity has also picked up so far in the month and the inflows amounted to $682 million between 3-10 September.
Rupee sentiment remained strong against dollar also due to lack of dollar demand from oil refiners in spite of soaring global oil prices.
Mumbai, 11 September Rupee inched towards a nine-year high todayas traders bet on strong capital inflows into a local initial public offering (IPO), and as the dollar hovered near a 15-month low against a basket of currencies.
At 9:20 a.m. the rupee was at 40.56/57 per dollar moving up from the previous close of 40.6550/6650. It hit a nine-year peak of 40.20 in July.
Dealers said they expected $300-$500 million of inflows toward the share sale of state-run Power Grid Corp of India, which aims to raise Rs30 billion ($740 million) in its IPO that opened on Monday.
Foreigners bought $682 million of local equities this month, after being net sellers of about $1.9 billion in August. Foreign funds have bought nearly $9.1 billion of shares in 2007.
The dollar came under heavy selling following 31 Augusts data which showed that companies cut 4,000 jobs in August, the first such fall in four years.