Rupee at over 5-mth high, closes at 52.40 against dollar
Mumbai: The rupee on Monday staged a strong recovery by washing out initial losses to close 45 paise higher at 52.40, an over five-month high, on sustained capital inflows and heavy dollar sales by exporters and banks.
A weak performance by the American currency in overseas markets also helped the rupee rise for the third straight day, said forex dealers.
At the Interbank Foreign Exchange (Forex) market, the local unit resumed lower at 53.00 a dollar compared to last Friday's close of 52.85.
The sentiment reversed on dollar selling by exporters and some banks along with foreign funds inflow worth over Rs 200 crore in local shares.
The rupee finally settled near the day's high levels of 52.40, a rise of 45 paise or 0.85 percent. This is the highest since rupee had settled at 52.08 on April 20, 2012.
"The rupee made a five month high against the dollar. The gain in the rupee was on the back of improved current account deficit which was seen a major worry by the investors," said Abhishek Goenka, Founder & CEO, India Forex Advisors.
Alongwith domestic factors, the dollar index -- a gauge of six major global rivals -- was down by 0.11 percent. The euro advanced from a three-week low against the dollar on reports of favourable stress-test results bolstered confidence in Spain's banking system.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "The rupee reversed initial weakness into sharp gains on rising capital inflows."
Meanwhile, the Indian stock market benchmark Sensex today rose by another 61.17 points. Foreign institutional investors bought a net Rs 19,300 crore in Indian stocks in September, their strongest purchases this year since February.
We expect rupee to trade in the 52.50-54 range in the next few months amidst favourable sentiments, although a sharper than expected slowdown of US, China and more uncertainty on the European debt crisis may pose risk to this range, said Upasna Bhardwaj, Chief Economist, ING Vysya Bank.
The premium for the forward dollar closed lower on fresh receipts by exporters.
The benchmark six-month forward dollar premium payable in March settled weak at 162-164 paise from last weekend's close of 165-167 paise.
The premium for far-forward contracts maturing in September ended down at 305-307 paise from 311-313 paise.
The RBI has fixed the reference rate for the US dollar at 52.7845 and for euro at 67.7850.
The rupee continued it upward march against the pound sterling to end at 84.58 from last Friday's close of 85.59 and shot up further against the Japanese yen to 67.19 per 100 yen from 68.10.
It, however, bounced back against the euro to 67.53 from previous close of 68.32.
More from India
More from World
More from Sports
More from Entertaiment
- Cortana for Android available for public beta in US
- Xiaomi Redmi 2 Vs Redmi 2 Prime: Specification comparisons
- Middle class woes to continue, wholesale onion price shoots up to Rs 57 per kg
- Alleged land encroachment in Greater Noida: HC asks DM to decide representation in 3 months
- Watch: Review of Mahindra TUV300