Rupee rises 0.1% against dollar

Rupee rises 0.1% against dollar

Mumbai: The rupee rose on speculation exporters will convert overseas earnings into local currency, boosting the supply of dollars in the financial market.

Companies with overseas income may seek to exchange the greenback for rupees after the Indian currency snapped a three-month rally to retreat 0.6% since 30 November. A weaker rupee boosts the value of export earnings.

India’s overseas sales rose 18% in November from a year ago, gaining for the first time in 14 months, according to data provided last week by trade secretary Rahul Khullar.

Exporters are expected to sell their dollars as currency levels look good for them to do so, said Vikas Babu, a foreign-exchange trader at state-owned Andhra Bank in Mumbai. The rupee may get some support from such sales.

The rupee climbed 0.1% to 46.82 per dollar, according to data compiled by Bloomberg. The currency is Asia’s best performer this quarter with a 2.8% gain and has advanced 4.2% in 2009.

Offshore contracts indicate bets the rupee will trade at 46.84 per dollar in a month, compared with expectations of 46.94 on Monday.

Forwards are agreements in which assets are bought and sold at current prices for future delivery.

Non-deliverable contracts are settled in dollars rather than the local currency.