The Indian rupee rose for a second
consecutive session on Tuesday, as gains in domestic shares
after foreign investors turned buyers following a three-day
selling streak helped, and overcoming some volatility earlier in
The Reserve Bank of India kept interest rates unchanged as
widely expected and voiced a commitment to bring down inflation,
which is also expected to be supportive for the rupee in the
But in the near-term, analysts say, the currency will likely
be impacted by global markets after sudden falls had sent the
currency to its worst weekly performance since the record low
levels in August last week.
"In the absence of any major domestic events or data in the
rest of the week, the market will continue to monitor the global
geo-political tensions for cues," said Hari Chandramgethen, head
of foreign exchange trading at South Indian Bank.
"The range of 60.65 to 61.40 on the rupee should hold for
the week," he added.
The partially convertible rupee closed at
60.8450/8550 per dollar compared to 60.93/94 on Monday. The
rupee moved in a wide range of 60.69 to 60.95 during the day.
The unit gained 0.4 percent on Monday, its biggest single-day
gain since July 11.
Gains in domestic shares helped the rupee after the RBI also
lowered minimum bond holding requirements for lenders to spur
Shares were also helped after foreign investors bought
Indian shares worth $61.10 million on Monday after selling
$494.7 million worth in the previous three sessions.
Corporates and custodian banks were active sellers of
dollars, dealers said.
In the offshore non-deliverable forwards, the
one-month contract was at 61.21 while the three-month contract
was at 61.79.
FACTORS TO WATCH
* Euro dips on weaker service surveys
* Lower U.S. yields support Asia FX, even rupiah
* Strong earnings lift Europe stx; euro falls on PMIs
* Foreign institutional investor flows
* For data on currency futures