Rupee near 2-week peak on share gains; dollar aids

Rupee near 2-week peak on share gains; dollar aids

Mumbai: The Indian rupee continued to trade close to 2-week highs Wednesday afternoon, boosted by gains in local shares and the dollar’s weakness versus majors ahead of the Fed meeting outcome due around 11:45pm.

At 4:00pm, the partially convertible rupee was at 44.31/32 per dollar, after touching 44.24, its highest since 19 October and stronger than its close of 44.37/38 on Tuesday.

On Tuesday, the Reserve Bank of India (RBI) raised its key policy rates for the sixth time since March and said it was unlikely to adjust rates again in the near future but would remain vigilant about inflation that remains above its comfort level.

RBI is seen raising rates once more this fiscal year ending in March, according to economists polled by Reuters.

The dollar held steady on Wednesday as the Federal Reserve looked set to add more stimulus to spur a flagging recovery, a move analysts said would weigh on US yields and ultimately put more pressure on the greenback.

At around 11:45pm, the Fed is expected to announce plans to buy hundreds of billions of dollars in US government debt in order to foster a stronger economic recovery.

Indian shares closed higher on Wednesday, in line with firm world stocks, with financials leading the gains.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were at all at 44.49, with the total traded volume on the three exchanges at about $4.3 billion.