Chart: Rupee has its best day in 7 months as foreign investors bet on India reforms

[caption id=“attachment_80196” align=“aligncenter” width=“600”]  Graphic source: Yahoo Finance[/caption]

The rupee strengthened to its highest level in more than seven months on Tuesday, tracking broad global losses in the dollar and as foreign investors continued to buy into a record-setting rally in domestic shares this month.

The US dollar nursed broad losses early on Tuesday, having come under pressure late in New York as investors bought the euro and drove the Australian dollar to its highest this year.

The partially convertible rupee trading at 60.50/51 per dollar at 9:06 a.m., its strongest level since August 12 and higher than its Monday’s close of 60.77/78.

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Overseas investors bought Indian shares worth 14.65 billion rupees and 10.56 billion rupees worth of index futures on Monday, when shares hit a record high, provisional exchange data showed.

The finance ministry had yesterday said the stength in the stock markets and rupee points towards a stabilised economy and exuded confidence that growth will improve in the coming months.

“I certainly believe … the economy has stabilised and that is reflected in rupee and stock markets. And going forward, I think, we will see growth numbers also improving,” Economic Affairs Secretary Arvind Mayaram PTI reported as saying.

On the back of strong foreign investor flows, the stock market barometer BSE Sensex today jumped more than 1 percent to log new lifetime high, while the rupee appreciated 24 paise to trade at 60.65 against the US dollar.

Agencies