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Fourth straight day of gains for rupee as equity rally draws funds

Fourth straight day of gains for rupee as equity rally draws funds
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First Published: Tue, Apr 07 2009. 12 01 AM IST

Strengthening currency: The rupee advanced 0.6% to 50.05 per dollar at close in Mumbai on Monday, off an early high of 49.88. Bloomberg
Strengthening currency: The rupee advanced 0.6% to 50.05 per dollar at close in Mumbai on Monday, off an early high of 49.88. Bloomberg
Updated: Tue, Apr 07 2009. 12 01 AM IST
Mumbai: The rupee rose for a fourth day, the longest winning streak in two months, as a rally in stocks added to signs a global credit crisis is easing.
The currency extended a four-week advance after US Fed chairman Ben Bernanke said policies to unfreeze credit markets are working.
Strengthening currency: The rupee advanced 0.6% to 50.05 per dollar at close in Mumbai on Monday, off an early high of 49.88. Bloomberg
The benchmark Bombay Stock Exchange index, the Sensex, has climbed 8.5% this month, adding to March’s 9.2% advance.
Latest data showed equity purchases by overseas investors exceeded sales on 1 April, following three days of net sales.
“The positive sentiment in the equity markets is deepening and that has helped the rupee maintain its rising streak,” said Ravindra Babu, a currency trader at state-owned Andhra Bank in Mumbai. “That trend will continue in the near term.”
The rupee closed at 50.04-50.05 per dollar, off an early high of 49.88, its strongest since late February and 0.6% stronger than Thursday’s close of 50.33-50.35.
The markets were closed on Friday for a holiday and will shut again on Tuesday for a religious festival.
Reserve Bank of India governor D. Subbarao said in Mumbai on Monday that the country’s economic recovery will be sharper than that of the rest of the world.
The central bank and the government have taken all policy measures that are required to stimulate growth in the $1.2 trillion (around Rs60 trillion) economy, he said.
The Reserve Bank’s policy measures have been tailored to shield the economy from the impact of the global economic crisis, with the objective of curbing the slump, Subbarao said.
The central bank has cut benchmark interest rates five times since September to record lows. It has also reduced the cash reserve ratio, or the proportion of deposits banks must hold as reserves, to spur lending.
Asian economies are poised to spring back from the biggest slowdown in at least a decade as cheaper commodities, coupled with fiscal and monetary measures, will boost growth by at least 2 percentage points in the next four quarters, HSBC Holdings Plc. economists Robert Prior-Wandesforde and Frederic Neumann wrote in a report received by email on Monday.
Reuters contributed to this story.
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First Published: Tue, Apr 07 2009. 12 01 AM IST
More Topics: Rupee | Currency | Dollar | Markets | Stocks |