Rupee spurts 20 paise to end at 7-month high of 69.34 against the US dollar on robust foreign inflows
Rupee in the four sessions to Thursday has appreciated by 80 paise or 0.8 percent on hopes of forex inflows
The Reserve Bank Wednesday said it will inject long-term liquidity worth $5 billion into the system through dollar-rupee swap
The strong foreign fund flows in current month also bode well for the rupee strength
The dollar index, which gauges the greenback's strength against a basket of six currencies, gained 0.24 percent to 96.78
Mumbai: The rupee appreciated by 20 paise to close at a seven-month high of 69.34 against the US dollar Thursday, extending gains for the fourth session in a row, on robust foreign inflows ahead of general elections.
The domestic currency in the four sessions to Thursday has appreciated by 80 paise or 0.8 percent on hopes of forex inflows.
"Rupee and sovereign bonds have recovered from day's low and turned positive even after RBI's plan to inject $5 billion liquidity via three-year foreign exchange swap auction," said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.
The Reserve Bank Wednesday said it will inject long-term liquidity worth $5 billion into the system through dollar-rupee swap arrangement with banks for three years.
"RBI announcement will have a limited impact on USD/INR spot on higher rupee liquidity in the economy, expectations of lower OMOs and likely greater FX inflows on lower hedging costs," Sharma said.
The strong foreign fund flows in current month also bode well for the rupee strength.
"FIIs have flooded Indian markets with $1.8 billion till date in March which has partially helped market rally," said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.
At the Interbank Foreign Exchange market, the rupee opened weak at 69.75 a dollar over its previous closing price of 69.54. The local unit moved in a range of 69.78 to 69.26 before finally ending at 69.34, showing a gain of 20 paise over its last close.
This is the highest closing level since 10 August, when the rupee had finished at 68.83.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, gained 0.24 percent to 96.78.
Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 1,482.99 crore Thursday, as per provisional data.
Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas, said that capital markets seem to be factoring in another term for the current government. FIIs have pumped in Rs 30,000 crore this year.
Meanwhile, Brent crude futures, the global oil benchmark, rose 0.16 percent to trade at $67.66 per barrel.
Benchmark indices Sensex and Nifty closed almost flat Thursday after a volatile trade. The BSE Sensex erased its early gains to end up by just 2.72 points, or 0.01 percent, at 37,754.89, extending the winning run to a fourth session. The broader NSE Nifty closed marginally up by 1.55 points, or 0.01 percent, at 11,343.25.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 69.6657 and for rupee/euro at 78.8416. The reference rate for rupee/British pound was fixed at 92.2880 and for rupee/100 Japanese yen at 62.43.
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Rupee gains for second straight session, settles 46 paise up at 69.56 against US dollar as crude oil prices ease
The rupee had rebounded by 23 paise to close at 70.02 against the US dollar Friday. The forex market was closed on Monday due to general elections in Mumbai
Forex dealers said selling of the American currency by exporters and sustained foreign fund inflows also propped up the rupee
Rupee furthers gains by 25 paise to 69.64 against US dollar in early trade on sustained foreign fund inflows
At the Interbank Foreign Exchange, the rupee opened at 69.73 against the US dollar and advanced to 69.64, showing a rise of 25 paise over the previous close