Rupee rebounds 54 paise to 2-month high of 61.39
Mumbai: The rupee bounced back by 54 paise to close at an almost two-month high of 61.39 against the dollar amid sales of the US currency by exporters, firm equities and capital inflows.
The local currency opened at 62.20 a dollar from the previous close of 61.93 and immediately touched a low of 62.29 at the interbank foreign exchange market.
It rebounded to a high of 61.32 on dollar selling by exporters and positive local equities before closing at 61.39, a rise of 54 paise or 0.87 percent. It was the highest close for the local currency since 61.19 on August 13.
The dollar had shown strength on expectations US lawmakers would reach an agreement on the debt ceiling and prevent a default.
"The initial weakness in the rupee was mainly attributed to the strength in the US dollar," said Abhishek Goenka, CEO of India Forex Advisors. "Later, a spur of gain was seen on the back of local banks selling dollars. The market is expecting some more measures to be announced, which would further help the rupee to gain."
Goenka also said the rupee got support from an IFC plan to sell USD 1 billion of rupee bonds offshore and use the proceeds to finance private sector investment in India.
The International Finance Corporation (IFC), a member of the World Bank Group, yesterday announced the launch of a USD 1 billion offshore rupee bond programme to strengthen India's capital markets and attract greater foreign investment.
The 30-share S&P BSE Sensex closed up 23.65 points after a choppy session. Foreign institutional investors bought a net Rs 326.58 crore of shares yesterday, as per provisional data with the stock exchanges.
Forward dollar premiums remained weak on sustained receipts by exporters.
The benchmark six-month forward dollar premium payable in March declined to 227-230 paise from 233-1/2-235-1/2 paise previously and far-forward contracts maturing in September dropped to 432-435 paise from 438-1/2-441-1/2 paise.
The RBI fixed the reference rate for the dollar at 62.1383 and for the euro at 83.8725.
The rupee improved further to 97.91 against the pound from 98.80 previously and to 83.07 per euro from 83.70.
It bounced back against the Japanese yen to 62.78 per 100 yen from 63.67.