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Rupee gains 16 paise to close at 1-week high

PTI 21 Aug 2012, 21:16:32 IST
Mumbai, Aug 21: The rupee today gained 16 paise to end at one-week of high of 55.57 against the US dollar in line with firm equities amid sustained selling of the American currency by exporters.

Forex dealers said a steep fall in dollar value overseas amid consistent capital inflows also boosted the rupee sentiment.

At the Interbank Foreign Exchange (Forex) market, the local unit commenced higher at 55.55 a dollar against last weekend's close of 55.73.

Later, it moved in a narrow range before concluding at 55.57, a rise of 0.29 per cent.

Meanwhile, the BSE benchmark Sensex today spurted by 194.18 points to end at over five-month high of 17,855.26.  “Rupee appreciated today on the back of strong equity market, Asian currencies and euro. There was also bit of selling of dollars by corporate houses,” Hemal Doshi, currency strategist at Geojit Comtrade, said.

However, the appreciation was not sharp as oil importers bought dollars from the market possibly due to the announcement of strike by some public sector bank employees, he said, adding that going ahead, rupee is showing an appreciating bias.

Meanwhile, retail inflation, based on the Consumer Price Index (CPI) declined marginally to 9.86 per cent in July, from provisional estimate of 10.02 per cent in June. 

Foreign Institutional Investors (FIIs) infused USD 58.02 million on last Friday, taking a total to over USD 11.43 bln in the current calender year till August 17.  Continued dollar selling by exporters and some banks on hopes of further fall in dollar value overseas also aided the rupee rise.

The dollar index was down by 0.44 per cent against a basket of six major global currencies, while the New York crude oil was trading just below USD 97 a barrel in Europe.

Abhishek Goenka, founder & CEO, India Forex Advisors, said, “The dollar selling by banks and the exporters was supporting the rupee. The rupee was also gaining on account of a stable Euro as the currency was rising ahead of the ECB meet to be held this week”.

The premium for the forward dollar continued to rule weak on persistent receivings by exporters.

The benchmark six-month forward dollar premium payable in January moved down further to 167-1/2-169 paise from last Friday's close of 171-173 paise.

The premium for far-forward contracts maturing in July also dipped to 319-320 paise from 326-328 paise.

The RBI has fixed the reference rate for the US dollar at 55.5405 and for euro at 68.7185.

The rupee fell back slightly against the pound sterling to 87.57 from last weekend's close of 87.48 while declined further against the euro to 69.02 from 68.88.

It, however, recovered against the Japanese yen to 69.95 per 100 yen from last close of 70.17.