Rupee hits fresh 2-1/2-month high on robust inflows

Rupee hits fresh 2-1/2-month high on robust inflows

Mumbai: The rupee touched a fresh two-and-a-half month high on Friday on robust dollar inflows from corporate borrowings ahead of the fiscal year-end on 31 March, with strong shares also supporting.

The partially convertible rupee ended at 44.6650/6750 per dollar, 0.2% stronger than its previous close of 44.745/750. It strengthened as much as 44.6150 during the day, its strongest since 4 January.

“Month-end (dollar) demand is expected to come out on Monday and Tuesday, which may put a halt to the rupee’s appreciation; 44.50-44.60 range if supported, the rupee may see 44.80-44.85 or even more," said Ashish Barua, a senior inter-bank forex dealer with Indusind Bank.

Oil is India’s biggest import item and domestic oil refiners are the top purchasers of the dollar in the forex market.

Oil rose on Friday with Brent crude near $116, and analysts saw the risk of another price spike as unrest bubbled across the Middle East and western powers continued a military campaign in Libya.

Indian shares posted their best weekly gain in 20 months and rose 2.5% to a two-month closing high on Friday, as investors picked up bargains from battered down stocks ahead of the quarter-end.

Foreign funds have bought $539.19 million worth of shares in the month to 24 March, but have sold shares worth around $1.67 billion so far this year.