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Thursday, December 12, 2019

Rupee at six-week high,spurts by 105 paise vs US dollar

The rupee today gained by a massive 105 paise to close at a nearly six-week high of 54.38 against the US currency on increased capital inflows and offloading of dollars by banks and exporters.

Written by Agencies | Mumbai | Published: July 3, 2012 8:05:40 pm

The rupee today gained by a massive 105 paise to close at a nearly six-week high of 54.38 against the US currency on increased capital inflows and offloading of dollars by banks and exporters.

“The rupee made sharp gains tracking positive sentiment in the share market and the market has found hopes in Prime Minister Manmohan Singh,who is also Finance Minister,pushing reforms,” Pramit Brahmbhatt,CEO,Alpari Financial Services (India) said.

At the Interbank Foreign Exchange (Forex) market,the rupee opened higher at 55.35 a dollar from yesterday’s close of 55.43. It immediately touched a low of 55.44 on some hesistancy in stock markets and dollar demand.

However,the tide turned with exporters selling dollars and a fresh dose of capital inflows into stocks. FIIs pumped in nearly Rs 590 crore in the stock market,as per provisional data. This helped rupee bounce back sharply to a high of 54.35.

The domestic currency closed at 54.38,up by 105 paise or 1.89 per cent,registering the fourth largest gain in absolute terms in the last decade.

“The rupee also appreciated due to improved sentiment domestically and FII auction supply that will come post allotment,” said Moses Harding,Head – ALCO and Economic & Market Research,IndusInd Bank.

The government last week had increased foreign investor limits in government debt by USD 5 billion and the increased limits will be auctioned tomorrow.

According to Hemal Doshi,Currency Strategist,Geojit Comtrade,the rupee has got support as sentiment improved in the market place on the back of expected policy action from the government soon.

Meanwhile,the Indian stock market benchmark Sensex closed up by nearly 27 points or 0.15 per cent.

Forex traders said the dollar was under pressure today globally.

The dollar index surrendered its initial gains and trading flat against its major six rivals in Asian trading hours today,with investors awaiting European Central Bank and Bank of England action this week.

The Euro climbed to an overnight high of 1.261 as reports said European Central Bank board member Christian Noyer backed the idea of adopting a bank deposit guarantee program amid speculation that Greece will renegotiate its bailout package.

These developments aided the sentiment in favour of rupee. Abhishek Goenka,Founder & CEO,India Forex Advisors,said,”The rupee was seen breaking all the key support levels today as a momentum has been created on account of stability in the local and global markets.”

As tomorrow the SEBI is scheduled to auction the increased limit in the G-Sec securities,we could see rupee appreciating further,Goenka added.

The premium for the forward dollar eased on fresh receivings by exporters.

The benchmark six-month forward dollar premium payable in December fell back slightly to 178-180 paise from overnight close of 179-181 paise.

The premium for far-forward contracts maturing in June also moved down to 323-325 paise from 325-327 paise previously.

The RBI fixed the reference rate for the US dollar at 54.8125 and for euro at 69.0615.

The rupee rebounded against the pound sterling to end at 85.31 from yesterday’s closing level of 86.86 and also shot up further to 68.46 per euro from 69.90 previously.

It continued to rule sharply firm against the Japanese yen to settle at 68.15 per 100 yen from last close of 69.53.

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