Rupee rebounds from 9-month low, gains 7 paise

Rupee rebounds from 9-month low, gains 7 paise

Mumbai: Recovering from the nine-month lows during the day, the rupee on Monday gained 7 paise to close at 45.67/68 against the US currency on late dollar selling and smart bounce back in equity markets.

A weak dollar overseas too aided the rupee sentiment but sustained capital outflows capped the surge, dealers said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit opened sharply down at 45.92/93 a dollar from 45.74/75 last weekend. Within a few minutes of trade it fell to 46.10, a level not seen since 30 November 2010, when it had hit a low of 46.12.

Dealers attributed the initial fall in the rupee to the initial weakness in local equities amid continued dollar demand from importers, mainly oil refiners.

However, smart recovery in stocks and dollar selling by exporters in later part of the day helped the rupee rebound and close with a gain of 7 paise, they added.

“Strong local stock markets, gaining Asian peers and heavy selling by exporters negated the pressurizsing effect of dollar buying by the oil companies," India Forex Advisors CEO Abhishek Goenka said.

Alpari Financial Services (India) CEO Pramit Brahmbhatt said, “The rupee traded range bound initially, but late dollar demand helped recovery, mainly taking cues from firm Asian peers and weak dollar overseas."

The dollar index, gauging of six major currencies, was down by nearly 0.2% while New York crude oil was trading near $83.5 a barrel in European market.

Meanwhile, the Bombay Stock Exchange (BSE) benchmark Sensex closed up by over 200 points or 1.24%.

FIIs pulled out over $417 million in the last week taking a total withdrawal to nearly $1.7 billion in current month till 19 August.

The rupee premium for the forward dollar recovered sharply on fresh paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in January shot up to 75-78 paise from last Thursday’s close of 58-62 paise. Far-forward contracts maturing in July also jumped to 147-149 paise from 125-129 paise previously.

The RBI fixed the reference rate for the dollar at Rs45.9483 and the euro at Rs66.0129.

The rupee improved further against the pound sterling to end at Rs75.39/41 from last weekend’s close of Rs75.42/44 while recouped against the Japanese yen to Rs59.48/59 per 100 yen from Rs59.72/74 previously.

It, however, fell back to Rs65.86/88 per euro from its last close of Rs65.72/74.