Rupee snaps 3-week fall; closes at 54.77 against dollar
Mumbai: Rupee broke its three-week falling trend and appreciated by 29 paise to close at over 1 week high of 54.77 against the dollar during the shortened week under review following strong local equities amid fresh dollar selling by exporters and some banks.
The Forex market was closed on December 25 for observing "Christmas".
Persistent capital inflows amid weak dollar overseas on concerns over the US fiscal cliff also helped the rupee recovery, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced slightly weak at 55.10 as against last weekend's close of 55.06 and immediately touched a low of 55.21 on Monday following month-end as well as year-end dollar demand from importers, mainly oil refiners.
Later, it turned positive on dollar selling by exporters and some banks amid continued foreign fund inflows. It touched a high of 54.72 before concluding at 54.77, showing a rise of 29 paise or 0.53 percent. In last 3 weeks, it had dropped by 80 paise or 1.47 percent.
Sensex closed the week higher by 202.84 points or 1.05 percent while Foreign Institutional Investors (FIIs) injected USD 877.12 million in the first 3 trading days of the week, as per Sebi data.
The Commerce Ministry approved a package of incentives to boost exports, which supported the rupee.
Mr. Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The INR regained some of the lost ground of previous few weeks. The trading activity remained low due to Christmas and New Year vacations plagued global and domestic markets with thinner volumes."
"The hopes of an accommodative monetary policy by the RBI in the last quarter of the financial year 2012-13 helped the recovery in Rupee, supported by rising capital inflows and exporter selling."
"The month end and quarter end demand for dollar from Oil and Gold importers continued to restrict strengths in INR. Exporters can take advantage of the rise in pair towards 55.50 - 56.00 levels for covering their receipts as a move above 54.70 shall witness the pair strengthening towards 54.20 levels," he added.
The RBI fixed the reference rate for US dollar and euro at Rs 54.8473 and Rs 72.6298 from Rs 55.0860 and Rs 72.7730, respectively, in the last weekend.
The Rupee premium for the forward dollar remained weak on sustained receiving by exporters.
The Rupee premium for the benchmark 6-month forward dollar payable in May dropped further to 148-150 paise from last weekend's level of 157-1/2-159-1/2 paise and far-forward contracts maturing in November also declined sharply to 288-290 paise as against 301-303 paise.
The rupee recovered smartly against Pound Sterling to end the week at 88.31 from preceding weekend's level of 89.44 and also hardened against the euro to finish at 72.16 from last weekend's level of 72.71.
However, it bounced back against the Japanese yen to close at 63.51 per 100 yen from 65.42 last weekend.