Mumbai: The rupee extended its gain against the US currency for the third straight day by closing at Rs40.77/78 a dollar, buoyed by surging Asian equity markets, amid concerns about the central bank intervention and soaring oil prices.
The domestic currency gained eight paise, registering a recovery of over 20 paise in the last three sessions after depreciating to 40.9750/9850 a dollar on 13 June.
In active trade at the Interbank Foreign Exchange (forex) market, the Indian unit resumed firm at 40.75/76 and later touched a high of 40.72, following a strong rally in Asian markets. It had closed at 40.85/86 per dollar on Friday, 15 June.
Early gains were also attributed to anticipation of heavy FII inflows for the follow-on public issue of the India’s largest private sector bank ICICI Bank, which opens on 19 June.
Fairly good dollar demand from oil companies in the light of high global oil prices weighed on the rupee sentiment, forex dealers said, adding that “the rupee pared gains after a firm beginning”.
The Indian currency is expected to gain further ground in the remaining days of the month due to robust dollar supplies and expectations of an increase in inflows through the equity market route, marketmen said.
The oil prices traded close to a nine-month peak in New York owing to concerns about fuel supplies in the United States, where the summer driving season is underway.
New York’s main oil futures contract, light sweet crude for delivery in July, soared as high as $68.25 a barrel, before pulling back to $67.84 or 16 cents below the close on Friday, 15 June.