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Rupee hits over one-month high

Source : REUTERS
Last Updated: Fri, Feb 28, 2014 12:50 hrs
Rupee

The rupee strengthened to its highest in more than a month on Friday boosted by bunched-up dollar inflows and selling by exporters, and aided by gains in the euro, which improved risk appetite.

The rupee rose 1.5 percent on the month, its biggest monthly gain since October, after foreign investors bought a net $2.05 billion in debt and stocks in February.

But worries in emerging markets are starting to crop up again, after a tumbling Chinese yuan cast a shadow in the region, while political tensions in Ukraine also raised concerns.

More immediately, trading will be dominated by October-December economic growth data due later in the day, with the rupee expected to hold in a 61.50 to 62.20 range next week unless there are any major surprises.

"There were inflows through the day today with exporters also selling alongside the bunched-up flows. The dollar's broad weakness also added to the positive sentiment in the second half," said Vikas Babu Chittiprolu, a senior foreign exchange trader with Andhra Bank.

The partially convertible rupee closed at 61.75/76 per dollar, its highest since January 21. It had closed Wednesday at 61.98/99. Financial markets were closed on Thursday for a local holiday.

For the week, the unit rose 0.6 percent.

The rupee opened weaker on the back of global cues and month-end dollar demand from importers including oil firms, but exporters and foreign banks stepped in to sell the greenback at higher levels.

Later, the euro rose to its highest level against the dollar this year after euro zone inflation came in above expectations, easing pressure on the European Central Bank to loosen monetary policy next week.

In the offshore non-deliverable forwards, the one-month contract was at 62.17 while the three-month was at 62.95.


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