Home >News >India >Rupee strengthens to hit ten-week high

MUMBAI : Indian rupee on Friday strengthened past the 74 mark to hit a ten-week high against a dollar amid continued foreign inflows in equities as well as debt markets.

Gains in Asian currencies along domestic equities since past few sessions helped the greenback.

Also, a recent comment by the Reserve Bank of India governor Shaktikanta Das in an interview with CNBC TV on it wouldn't announce a policy shift without first preparing the market for it, boosted sentiments among traders.

The home currency closed at 73.69—a level last seen on 16 June, up 0.73%, its maximum gains since 16 April. The currency opened at 74.18 and touched a high and a low of 73.69 and 74.20 respectively.

So far this August, FIIs have bought a combined $2.33 billion in equities and debt markets. In the debt market, they bought nearly $1.55 billion, the first time since December 2020. For equities FII bought nearly $800 million.

Among Asian peers, Thai baht was up 0.34%, Singapore dollar 0.2%, Malaysian ringgit 0.1%, South Korean won 0.1%, China offshore 0.05% and Philippine's peso 0.04%.

Local equity markets closed at a fresh record high with closing for the first time above 56,000 mark. The benchmark Sensex index rose 0.31% to end at 56,124.72 points while Nifty advanced 0.41% to an all-time high of 16,705.20 points.

Traders were cautious ahead of US Federal Reserve chair Jerome Powell's speech at Jackson Hole symposium that could offer hints on the timeline for slowing of its bond purchases programme.

Local equities hitting all-time high every day since past few sessions amid hopes of improvement in macroeconomic data. A sharp improvement in key economic indicators such as GST collection, auto sales volume despite supply disruption, improvement in collection efficiencies of MFIs and other high frequency indicators such as e-way bills, power consumption, strong import-export growth in July, etc. indicate sustainable rebound in corporate earnings in subsequent quarters.

"The dollar index is on a tear as the US Fed readies to suck out massive pandemic-era liquidity from the markets. Albeit, with the domestic equities continuing into uncharted territory, scaling towards record highs recently, and a slide in crude oil prices from multi-year highs, the Indian rupee has been cushioned," said Sugandha Sachdeva, VP-commodity and currency research, Religare Broking.

“The rupee has been gravitating in a narrow range, but fears that Delta coronavirus variant could stall global economic recovery, and the Fed's continued communication to the markets that tapering is coming are the key variables leading to some risk-off sentiments in the markets," Sachdeva added.

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