Mumbai: The rupee touched its highest in more than a week as robust forex inflows outweighed a strong dollar overseas, and negative stocks in afternoon trade on Wednesday.
At 3:00 pm., the partially convertible rupee was at Rs 45.12/13 per dollar, after rising to Rs 45.0750, strongest since 14 December. It had ended at Rs 45.225/235 per dollar on Tuesday.
Strong dollar inflows persisted as corporates brought back funds borrowed through external commercial borrowings route, dealers said.
Corporates who brought in the dollar funds also hedged their exposures by paying in the forward dollar market pushing up the premium rates. The one-year forward dollar premium was up at 252.25 basis points from Tuesday’s close of 241.50 basis points.
“There are some foreign funds also who are hedging in the forwards after using up some of the debt limit,” said a dealer at a foreign bank. Indian shares turned negative on profit booking after rising as much as 0.5 percent in early trade.
Foreign funds had dumped a net $588.61 million worth of shares in this month until Monday. Total net foreign fund inflows so far in 2010 stand at $28.4 billion, on top of the $17.5 billion invested last year.
The euro hit all-time lows against the Swiss franc on Wednesday, with investors increasingly nervous about the single currency’s prospects given the euro zone’s peripheral debt problems.
The index of the dollar against six major currencies was down 0.3% at 80.487 points.
One-month offshore non-deliverable forward contracts were quoted at Rs 45.35, weaker than the onshore spot rate.
In currency futures, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock exchange were at Rs 45.1825, Rs 45.1850 and 45.1900 with the total traded volume on the three exchanges at about $3.5 billion.