×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Rupee up 0.4% on speculation exporters are selling dollars

Rupee up 0.4% on speculation exporters are selling dollars
Comment E-mail Print Share
First Published: Tue, Aug 18 2009. 09 43 PM IST
Updated: Tue, Aug 18 2009. 09 43 PM IST
Mumbai: The rupee rose on Tuesday, on speculation exporters were taking advantage of Monday’s slide, the biggest drop in nearly five months, to repatriate income.
The local currency on Monday sank to a five-week low as reports showing declines in US consumer confidence and foreign direct investment in China curbed demand for emerging market assets.
India’s economic growth is second only to China’s among the major economies of the world and that should help draw funds, said Vikas Babu, a trader at state-owned Andhra Bank.
“Exporters are capitalizing on the rupee’s fall,” Mumbai- based Babu said. “From a near-term point of view, the possibility of the rupee rising is more than it depreciating.”
The rupee advanced 0.4% to 48.80 per dollar at close in Mumbai, according to data compiled by Bloomberg. The currency had dropped 1.5% on Monday and reached 49, the weakest level since 13 July.
The rupee also gained on speculation a pick-up in monsoon rains will spur growth in the economy and attract more funds from overseas investors.
Monsoon deficit in drought-struck north-west Indian states narrowed after rains returned to the country’s biggest grain and sugar cane growing region after a two-week lull, a weather bureau official said.
Showers in the region were 40% below average on 16 August, down from 43% on 12 August, said S. Kaur, director at the India Meteorological Department in New Delhi.
Sugar output may be 16-18 million tonnes (mt) in the year starting 1 October, S.L. Jain, director general of the Indian Sugar Mills Association, said on Tuesday in Bangkok. That’s more than 15-16 mt forecast previously.
Funds based abroad bought $213.5 million (Rs1,040 crore today) more of local equities than they sold on 14 August, the biggest purchase since 30 July, according to data compiled by Bloomberg from the stock market regulator.
Offshore contracts indicate traders bet the rupee will trade at 48.92 per dollar in a month, compared with expectations of 49.08 on Monday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non- deliverable contracts are settled in dollars.
Comment E-mail Print Share
First Published: Tue, Aug 18 2009. 09 43 PM IST
More Topics: Markets | India | Rupee | Dollar | Shares |