Indian rupee gains as stocks rise, central bank moves watched

Indian rupee gains as stocks rise, central bank moves watched
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First Published: Wed, Jun 11 2008. 12 35 PM IST
Updated: Wed, Jun 11 2008. 12 35 PM IST
Reuters
Mumbai: The Indian rupee crept up on Wednesday on expectations foreigners may resume share purchases, and hopes the central bank would lend a supporting hand to check any sharp falls.
At 9:53 a.m, the partially convertible rupee was at 42.93/94 per dollar, stronger than Tuesday’s close of 42.96/97. It had hit a 13-month low of 43.21 on 22 May.
“The rupee may be in a 42.80-42.95 band and the undertone for dollar/rupee looks softish with stocks up and oil down a bit,” said L. Subramanian, chief currency dealer at ICICI Bank.
“With the central bank in the background, it will face strong resistance around these levels,” he said.
The central bank has intervened sporadically in the past few weeks between 42.90-43 to support the rupee.
One-month offshore non-deliverable forward contracts were quoting at 43.09/43.19, weaker than the onshore rate.
Indian shares rose more than 1.5% in early deals, a day after falling to its lowest level since August.
Data released late on Tuesday showed foreign funds had sold Indian shares worth $332.6 million the previous day, propelling the net outflow this year to more than $5 billion.
The rupee has fallen more than 8% this year, largely due to the equity outflows. In 2007, it had gained 12.3% on the back of a record $17.4 billion foreign portfolio inflow.
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First Published: Wed, Jun 11 2008. 12 35 PM IST
More Topics: Markets | India | Rupee | Dollar | Central bank |