Mumbai: The rupee rose for the first time this week on speculation exporters took advantage of its slide to a seven-week low to repatriate overseas earnings.
The rupee reversed an earlier drop as some companies increased bets India’s economic recovery prospects will lure more overseas funds and limit currency losses, according to Naveen Raghuvanshi, a trader at Development Credit Bank Ltd. A government report this week showed growth in gross domestic product last quarter accelerated for the first time since 2007, indicating that the global recession’s impact on India is waning.
“The dollar is not rising beyond a point, which shows the undertone is in favour of the rupee,” Mumbai-based Raghuvanshi said. “Exporters are covering some receivable positions.”
The rupee rose 0.1% to 48.9625 per dollar at close in Mumbai, according to data compiled by Bloomberg. It earlier dropped as much as 0.4% to 49.205, the lowest level since 13 July.
Global funds have bought $8.2 billion (Rs40,262 crore) more Indian stocks than they sold this year, following record net sales in 2008, data from the Securities and Exchange Board of India shows.
Offshore contracts indicate bets the rupee will trade at 49.10 to the dollar in a month, compared with expectations for a rate of 49.11 on Tuesday. Forwards are agreements in which assets are bought and sold at current prices for future delivery.
Non-deliverable contracts are settled in dollars rather than the local currency.