Weekly review: Rupee retains momentum for second-straight week

New Delhi: Consolidating momentum for the second-straight week, the rupee surged ahead by a whopping 31 paise to end at 64.70 against the US dollar cashing in on positive sentiments post Moody's upgrade of India's credit rating.

Frantic unwinding in the greenback largely helped the home currency to stay positive despite initial wobble.

Currency traders and exporters rushed to sell their receivables expecting a surge in dollar inflows from global investors in the face of Moody's decision to upgrade India?s sovereign rating after a gap of 14 years.

The sovereign rating upgrade comes close on the heels of a sharp improvement in country's ranking in the World Bank's ease of doing business survey.

A stellar rally in local equities further supplemented the currency velocity.

The Indian unit climbed a fresh 3-week high of 64.54 before giving back some gains.

Struggling dollar value alongwith fading Fed rate hikes expectations after minutes from the latest meeting showed some policymakers were concerned about stubbornly weak U.S. Inflation also lightened up the upbeat mood in the forex market.

It was another strong week for crude oil as OPEC combined political pressure in the Middle East as well as pipeline shutdown catapulted prices to another fresh two-year high amid hopes for output cuts extension.

Brent crude, the international benchmark is trading higher at USD 63.89 a barrel in early Asian trade.

At the Interbank Foreign Exchange (forex) market, the rupee opened modestly higher at 64.97 against Friday's close of 65.01.

However, some caution ahead of the FOMC meet outcome and surging curde prices triggered fresh dollar demand.

After hitting a low of 65.13 briefly, the local unit staged a spirited recovery towards the fag-end trade to revist its 3-week high of 64.54 before concluding at 64.70, showing a solid rise of 31 paise, or 0.48 percent.

Suspected intervention by central bank officials through state-run banks believed to have crubed sharp rupee appreciation.

The Indian currency has strengthened by a whopping 46 paise to the dollar in two-week spike.

The RBI fixed the reference rate for the USD at Rs 64.7328 and euro at Rs 76.7213, respectively.

Meanwhile, Foreign investors infused a whopping over USD 2 billion in the Indian equity markets this month so far, enthused by government's announcement of recapitalising PSU banks, improvement in global sentiment and stable currency.

This follows a net inflow of over Rs 3,000 crore in stock markets last month. Prior to that, FPIs had pulled out more than Rs 24,000 crore in the previous two months (August and September).

In the meantime, country's foreign exchange reserves rose by USD 240.4 million to USD 399.533 billion in the week to November 17, the weekly data from the Reserve Rank showed on Friday.

With PTI Inputs