Rupee up on local shares; RBI review eyed

Rupee up on local shares; RBI review eyed

Mumbai: The rupee was stronger in afternoon trade on Monday on gains in local shares, but underlying caution before the central bank’s policy review on 17 March kept the unit in a 5-10 paise band.

At 2:01pm, the partially convertible rupee was at 45.1600/1625, against Friday’s close of 45.24/25. So far in the day, it has moved in a range of 45.1375-45.2300.

The Reserve Bank of India is widely expected to raise policy rates by a quarter percentage point on 17 March, for the eighth time in about a year, to tame inflation amid strong growth momentum.

Government data earlier in the day showed wholesale price index (WPI) rose an annual 8.31% in February, well above the 7.79% forecast in a Reuters poll.

The index of the dollar against six major currencies was down 0.04% at 76.740 points, but higher from 77.315 points at end of trade in local currency market on Friday.

The one-month onshore forward premium was at 30.00 points, higher than Friday’s close of 28.75 points, while the three-month premium rose to 80.75, from 79.50 points.

The one-month offshore non-deliverable forward contracts were quoted at 45.42, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 45.2900, with the total traded volume at about $4.24 billion.