Rupee gains on equity inflow hopes

Rupee gains on equity inflow hopes


Mumbai: The rupee rose on Monday, 19 November, on expectations that buoyancy in local equities would accelerate capital inflows, but traders were wary of possible central bank intervention to check the unit’s gains.

At 10am (0430 GMT), the partially convertible rupee was at 39.28/29 per dollar, up nearly 0.1% from 39.32/33 at the previous close.

India’s main share index, Sensex, rose more than 1% in early trade. Foreigners have bought about $17 billion of stocks in 2007, well above the $10.7 billion record inflow for the whole of 2005.

“Dollar supplies are good as traders expect a rebound in local shares to push up foreign investment in the near term," a trader with a state-run bank said.

The Reserve Bank of India (RBI) bought a record $11.87 billion in intervention in September to check the rupee’s rise and analysts said it played an active role in October and November as well.

“We didn’t see the RBI today, but sentiment is wary about intervention if the rupee climbs sharply," the trader said.