Re continues gain, ends at 39.37 vs dollar

Re continues gain, ends at 39.37 vs dollar

Mumbai: Rupee rose for the eighth week, its best rising streak in more than five months, as overseas funds bought more local shares.

The currency rose to its highest since February 1998 as a report showed industrial output growth in August beat expectations. The growth was necessary to cut poverty and sustain the economy’s 9% pace of expansion, finance minister P. Chidambaram said at a seminar in New Delhi. The key stock index was propelled to a record this week as global funds bought Indian stocks.

“Overseas investors are betting that growth prospects are strong, which is why we are seeing sustained flows," said L.V. Prasad, chief currency trader at IndusInd Bank Ltd in Mumbai. “The rupee is on an upward trend."

Rupee rose 0.3% to 39.37 against dollar this week at the close in Mumbai, according to data compiled by Bloomberg. Production at factories, utilities and mines jumped 10.7% from a year earlier. That beat all but one of 18 forecasts in a Bloomberg survey of economists, where the median estimate was for an 8.6% gain. Car makers, including General Motors Corp., Honda Motor Co. and Volkswagen AG, plan to spend $6.6 billion (Rs25,938 crore) on new factories in India as demand rises.