Rupee up 37 paise to 62.50 vs dollar as crude oil prices drop

The rupee gained 37 paise to 62.50 against the dollar today after global crude oil prices dropped following a deal to restrict Iran's nuclear programme.

Lower oil prices would reduce the import bill for the country, which buys about 80 per cent of its crude requirements from overseas, and help to narrow the current account deficit.

In a deal with the US and other world powers yesterday, Iran agreed to limit its nuclear programme to get partial relief from sanctions. Oil prices fell on expectations curbs on Iran's crude exports would eventually be lifted.

At the interbank foreign exchange market, the rupee opened strong at 62.67 a dollar from the previous close of 62.87 and moved in a range of 62.44 to 62.70 before ending at 62.50, a rise of 37 paise or 0.59 per cent.

The benchmark 30-share Sensex snapped a three-day losing streak and closed 387.69 points or 1.92 per cent higher after sentiment was boosted by the fall in crude oil prices.

On Friday, the Reserve Bank of India said banks have time until December 31 to deliver loans from international or multilateral financial institutions provided they were sanctioned on or before November 31, the last day of a special swap window for overseas foreign currency borrowings.

"Rupee closed strong for the day against the dollar, taking cues from local equities which finished positive after news of the key deal between world powers and Iran on its controversial nuclear programme," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India). "RBI has extended the special forex swap window till December 31st, which will further help the rupee to trade strong."

Forward dollar premiums closed lower on fresh receipts by exporters.
The benchmark six-month forward dollar premium payable in April declined to 239-241 paise from 244-246 paise yesterday and far-forward contracts maturing in October dipped to 485-487 paise from 490-492 paise.

The RBI fixed the reference rate for the dollar at 63.0236 and for the euro at 84.9199.

The rupee dropped further to 101.82 against the pound from 101.44 previously. It was down to 84.98 per euro from 84.51 and improved to 62.12 per 100 Japanese yen from 62.40.