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Rupee at nearly 3-month high, up 53.80 vs dollar

Last Updated: Tuesday, April 30, 2013 - 19:32

Mumbai: The rupee on Tuesday gained 45 paise to end at nearly three-month high of 53.80 against the American currency on persistent selling of dollars by banks and exporters on the back of sustained capital inflows from foreign funds.

Extending gains for the second consecutive day, the domestic currency ended at 53.80 per dollar, showing a gain of 45 paise, or 0.82 percent. The rupee had last ended at 53.50 on February 8, 2013.

The rupee resumed higher at 54.12 per dollar as against the last closing level of 54.25 per dollar at the Interbank Foreign Exchange (Forex) Market and hovered in a range of 53.79 per dollar and 54.25 per dollar before ending at 53.80 a dollar.

Persistent capital inflows from foreign funds mainly boosted the rupee value against the dollar, a forex dealer said.

Foreign institutional investors (FIIs) bought shares worth a net Rs 620.38 crore yesterday as per provisional data from the stock exchanges.

The Indian benchmark Sensex rose by 117 points or 0.60 percent to end at 19,504.18.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said USD/INR Pair continued to trade high for the second day taking cues from the dollar which traded weak against the major currencies mainly against the yen.

The RBI is likely to cut interest rates for the third time this year by 0.25 percent as fall in inflation is expected to lift the economy from its lowest growth in a decade.

However, in London, the euro fell in their early trade after weak economic data gave further weight to expectations of an interest rate cut by the European Central Bank later this week.

Losses in the euro are likely to be limited on prospects the US Federal Reserve's ultra-loose policy will be maintained and weigh on the dollar.

In Los Angeles, the Japanese yen moved between small gains and losses against the US dollar in the wake of mixed data from the major export economy.

The premium for the forward dollar declined further due to sustained receipts by exporters.

"The Indian rupee was seen getting stronger against the US dollar. The gains in rupee were attributed to the speech of the Finance Minister where he said they will be making some amendments to the Finance bill so as to attract more fund flows to the Indian markets.

"The finance bill FY14 has been passed by the Lok Sabha. Also, the taxes on the interest payments to foreigners on government and corporate debt have been brought down to 5 percent from up to 20 percent for a two-year period," Abhishek Goenka, Founder and CEO, India Forex Advisors, said.

Globally, the euro rally above USD 1.3100 fizzled after the weaker-than-expected German retail sales. The discouraging data put a cap on the EUR/USD pair. The key question that remains unclear for now is whether the data is bad enough to prompt the ECB to act at this month's policy meeting, Goenka.

The benchmark six-month forward dollar premium payable in September finished lower 147-1/2-149 paise from Monday's close of 151-152 paise and far-forward contracts maturing in March also ended down at 310-311-1/2 paise from 314-1/2-316-1/2 paise.

The RBI fixed the reference rate for the US dollar at 54.2190 and for the euro at 70.9775.

The rupee recovered sharply against pound sterling to 83.27 from Monday's close of 84.22 and also bounced back against the euro to 70.34 from 70.98 previously.

It too rose against the Japanese yen to 55.17 per 100 yen from last close of 55.49.

The Forex and Money markets will remain closed Wednesday, May 1, on account of Maharashtra Day.


First Published: Tuesday, April 30, 2013 - 19:32
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