Rupee gets a lift from US shutdown
1 min read 03 Oct 2013, 09:28 AM ISTRupee gains most in two weeks to 61.74 per dollar
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Mumbai: The Indian rupee rose the most in two weeks on Thursday as a combination of factors, including the weakness of the US dollar against major world currencies and expectations of a recovery in domestic economic fundamentals, supported sentiment.
The failure of US lawmakers to resolve a budget impasse damped demand for the unit worldwide that supported the local currency heavily, dealers said. The rupee was the biggest gainer among Asian currencies on Thursday. It ended at 61.74 against the dollar, up 1.17% from its previous close of 62.465.
The unit rose to as much as 61.65 during the day. Besides, strength in most of the Asian currencies and local equity markets, too, favoured the rupee, dealers said.
“The dollar is taking a hit due to the US shutdown and that is helping the exchange rate," said Naveen Raghuvanshi, a trader at Development Credit Bank Ltd in Mumbai. “Equities are also positive and this is helping the rupee," fuelling optimism capital inflows will increase, he said.
On 30 September, the Democrats and Republicans in the US Senate failed to agree on a funding measure for the healthcare legislation known as Obamacare, leading to the government’s first partial US shutdown in 17 years.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 79.84, down 0.08% from the previous close of 79.90. It touched a high of 79.922 and a low of 79.74. This is the lowest level for the dollar since 6 February, 2013.
Since January this year, the rupee has weakened 10.92% and has lost the most after the Indonesian rupiah and the Japanese yen among Asian currencies during that period.
India’s benchmark equity Sensex ended at 19,902.07, up 1.97% or 384.92 points from the previous close.
The yield on India’s 10-year benchmark bond ended at 8.64% compared with Tuesday’s close of 8.736%.
Bloomberg contributed to this story.
