Rupee extends rise tracking shares; dollar eyed

Rupee extends rise tracking shares; dollar eyed

Mumbai: The Indian rupee extended gains on Friday afternoon tracking a rise in local shares which raised hopes for more foreign fund inflows, while an increase in the foreign investment limit in local debt also supported sentiment.

At 1:33pm, the partially convertible rupee was at Rs45.47/48 a dollar, off an high of Rs45.4550, but still stronger than Thursday’s 45.64/65 close.

The government increased the cap on foreign investment in government and corporate bonds by $5 billion each to $10 billion and $20 billion, respectively on Thursday.

Dealers said a further sharp upside to the rupee was being limited by gains in the dollar versus major currencies. The index of the dollar against six majors was up 0.2%. Asian currencies, however, were trading mixed.

The dollar vaulted above ¥85 on Friday on talk that Japanese authorities intervened for the second time this month to stem the yen’s creeping gains of the past few days.

Indian shares were trading up 0.6% and they would be closely watched through the day for cues on foreign fund flows.

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 all at Rs45.48, with the total traded volume on the three exchanges at about $4.7 billion.