Rupee seen up on strong risk appetite

Last Updated: Mon, Sep 10, 2012 05:01 hrs
An employee counts Indian currency notes at a cash counter inside a bank in Kolkata

The rupee is expected to appreciate against the dollar this week on improved risk sentiments across the globe, after assurance of support from the European Central Bank (ECB). This week, the rupee is being seen in the 55 to 55.50 range against the greenback. Last week, ECB President Mario Draghi agreed to launch a new and unlimited bond-buying programme to bring down the cost of borrowing for Euro zone countries.

On Friday, the rupee closed at 55.40 per dollar, 13 paise or 0.2 per cent higher as compared to the previous week’s close. The rupee opened on a positive note and touched a high of 55.36 and low of 56.03 during the rest of the week. However, dollar sales by corporates helped the rupee post gains on the last two trading sessions of the week.

Last week, foreign institutional investors net-sold $256 million from the Indian debt and equity markets, according to the Securities and Exchange Board of India. The Shome panel’s recommendation on postponement of General Anti-Avoidance Rules for three years is expected to boost capital inflows.

Dollar weakness also helped the rupee post gains last week. The dollar index, as measured against six major currencies of the world, fell to 80.25 from 81.21.

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