BackRupee closes at new high of 39.7650/7750 against dollar
Rupee closes at new high of 39.7650/7750 against dollar
Premium
Agencies
Closing
Mumbai: The rupee continued its upward march on 25 September and closed at nine-and-a-quarter-year high of 39.7650/7750 against the US currency following heavy capital inflows amid weak dollar overseas, cutting short Friday’s decline.
In active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed strong at 39.85/86 a dollar and rallied further to a high of 39.76, a level not seen since 11 May 1998. It later ended sharply higher at 39.7650/7750 a dollar.
The rupee has appreciated nearly 1.5% in the last three sessions after a hefty US rate cut last Tuesday.
The currency mainly got support from sustained upsurge in the equity markets where the benchmark Sensex ended up by another 282 points to close at a new peak of 16,845.83 today, completing five-session gaining streak.
Bullish capital markets due to US rate cut compelled foreign investors to invest in high yielding assets like Indian currency, boosting the rupee sentiment.
FIIs continued their buying spree and they picked up shares worth $2.25 billion in the current month and over $10.6 billion in the year 2007 so far.
Afternoon update
Mumbai: The rupee traded in a small range, quoting slightly lower at 39.7850/7950 against the dollar late morning, tracking movements in the equity markets.
In lacklustre activity at the Interbank Foreign Exchange (Forex) market, the local unit opened weak at 39.80/81 per dollar and moved in a narrow breadth of 39.81 and 39.77 per dollar before being quoted at 39.7850/7950 in late morning deals.
Dealers attributed little bit weakness in rupee value to stray dollar buying by oil refiners and suspected intervention by the Central bank to stem the domestic currency’s surge to protect exporters’ competitiveness.
But the rupee continued to get support from heavy capital inflows. Foreign Institutional Investors (FIIs) pumped in $1.23 billion in three days since 19 September.
Meanwhile, the stock markets displayed see-saw movements in small range early this morning.
The BSE benchmark index, Sensex, opened moderately higher by 70.08 points, then shed 34.83 points to touch 16,811.00 point on heavy profit booking.
Morning
Mumbai: The rupee eased on Tuesday, 25 September, from a nine-year high on slightly bearish cues from other Asian markets and on light profit taking, but traders said likely flows into the stock market would bolster the local unit.
At 10:30am (0500 GMT), the partially convertible rupee was at 39.785/795 per dollar, slipping slightly from Monday’s close of 39.770/775, when it hit a nine-year high of 39.72 — a level it last traded in May 1998.
“There are a lot of factors at play at the moment, and we’re expecting good two-way movement," said a dealer with a private bank.
The rupee came under pressure after fellow high yielding Asian units like the Philippine peso retreated after investors took profits following their recent rallies sparked by the US rate cut last week, which spurred local dealers to do the same.
India’s main share index rose to a record high for a fifth day in early trade, bolstered by strong foreign inflows.
Capital inflows have been a key driver for the rupee’s more than 11% gains this year. Foreign funds bought more than $1.2 billion of Indian shares over three days after a sharp US rate cut sparked interest in emerging market assets.
Still, renewed concerns about credit markets and a slide in the dollar hurt some Asian financial and technology stocks, which weighed on sentiment, traders said.
The International Monetary Fund said on Monday that turmoil in global credit and money markets was likely to continue as investors worry about the size of financial losses and where they might arise.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
