Mumbai: The rupee inched towards a 9-year high on 31 October 2007 as dealers expected foreigners to keep buying local shares and in anticipation of a US rate cut, but the market trod carefully fearing central bank intervention.
At 9:40am, the partially convertible rupee was at 39.31/32 per dollar, moving up from yesterday’s finish of 39.3950/4025, and in striking distance of a 9-year peak of 39.27 hit earlier this month.
“Flows are expected to hit today, but the market is concerned that investments may slow down in the near term if the authorities take steps to moderate capital flows,” said a dealer with a private bank.
Overseas investments into the Indian stock markets have been a key driver of the rupee, which has gained about 12.5% this year.
The rupee was also buoyed as the dollar plumbed a record low against the euro on expectations that the Federal Reserve will cut interest rates.