Mumbai: The rupee continued to surge against the US dollar and on 23 April 2007 ended at a nine-year high of 41.67/68, higher by nine paise from the previous close of 41.76/77 a dollar, on the back of dollar selling by traders and strong capital inflows.
The rupee last ended around today’s closing levels on May 29, 1998.
In volatile trade at the Interbank Foreign Exchange (forex) market, the local currency fluctuated in the range of 41.57 and 41.72 after resuming firm at 41.64/66 month-end demand for dollar from oil companies alternated by short selling by traders.
The rupee’s strength was also attributed to indications that the Reserve Bank of India may not intervene to check the currency’s surge in the light of continued inflation pressures. Inflation stayed beyond RBI’s tolerance level and was quoted at 6.09% for the week ending April 7.
Forex dealers said traders and banks were not willing to hold dollar positions ahead of the central bank’s annual monetary policy to be unveiled tomorrow.
The RBI is expected to focus on monetary tightening in the light of high inflation, which in turn, will be favourable for the rupee.