Mumbai: Rupee surged further against the US currency and touched a high of 39.28 a dollar during morning trade on 11 October, driven higher by sustained firmness in Asian equity markets amid some dollar demand.
In quiet trade at the Interbank Foreign Exchange (forex) market, the local currency resumed higher at 39.28/30 per dollar fromthe last close of 39.3100/3150 and later moved in a narrow range before being quoted at 39.31/32 a dollar late morning.
Rupee attempted to hit a fresh nine-and-a-half-year high of 39.26, last touched on 25 February, 1998, but dollar buying by state-owned banks prevented its surge, forex dealers said.
Traders feel that the domestic currency could reach 39 level in the near future on the back of unabated capital inflows, which surpassed all its previous records and touched $16 billion so far this year.
The Institute of Economic Growth, however, expects the Indian unit to depreciate to 40.50 to a dollar in the next three months, mainly due to widening trade deficit.
According to the latest data of the Ministry of Commerce and Industry, trade deficit during April-August this year widened to $32.5 billion from $19.9 billion in the same period last year.