Rupee at 1-week high as shares climb

Rupee at 1-week high as shares climb

Mumbai: The Indian rupee rose to its strongest in almost a week on Tuesday, supported by higher stock markets and a weaker dollar overseas.

At 10:25am, the partially convertible rupee was at Rs49.92/93 per dollar, 0.3% above Monday’s close of Rs50.09/10. In early trade, it strengthened to Rs49.70, its strongest since 19 November.

The rupee had hit a record low of Rs50.60 on 20 November.

Indian shares opened up 3%, taking cues from a rally across global markets after the US government’s rescue of Citigroup relieved wary investors.

Dealers said the dollar’s weakness against a basket of currencies on Monday also boosted sentiment for the rupee.

However, one-month offshore non-deliverable forward contracts were quoting at Rs50.62/77, weaker than the onshore spot rate, indicating the outlook for the currency continues to be bearish in the near term.

The rupee has lost more than a fifth this year on foreign fund withdrawals of a net $13.6 billion from Indian shares this year. In 2007, foreigners had bought a record $17.4 billion.