Rupee closes at 3-week high

The rupee rallied further by 35 paise to breach 62-level after nearly three-week to end at 61.93 against the Greenback following sustained dollar selling by exporters amid weak dollar overseas.

Continued weakness in local equities amid weekend capital inflows also aided the rupee rise.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed better at 62.15 a dollar from previous weekend’s close of 62.28 and immediately touched a low of 62.49 on dollar demand from banks and importers, amid a tepid stock market.

It later gained as dollar fell ahead of Fed Reserve Chief Janet Yellen’s testimony to US Congress and also fresh dollar selling by exporters to a high of 61.92 before settling the week at 61.93, revealing a rise of 35 paise or 0.56 per cent. Last week it has risen by 40 paise or 0.64 per cent.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, “To start the week Rupee traded strong with the support of positive local equity markets backed by the better than expected trade data numbers.”

He added, “Rupee expected to depreciate in coming days and trade near 63.00 levels. The trading range for the USD/INR pair is expected to be within 61.50 to 62.80.” 

The government data this week showed that industrial output remained in the negative territory for the third month in a row by contracting by 0.6 per cent in December, even as retail inflation eased to two-year low of 8.79 per cent in January.

The rupee premium for the forward dollar remained weak on sustained receipts by exporters. The benchmark six-month forward dollar premium payable in July moved down to 238.5-240.5 paise from last weekend's close of 243-245 paise and far-forward contracts maturing in January also declined to 482-484 paise from 486.5-488 paise.

The RBI fixed the reference rate for the US dollar at 62.2770 and for the euro to 85.1755 from 62.3155 and 84.6830 last weekend, respectively. The rupee fell back sharply against the pound sterling to 103.44 from last weekend's close of 101.77 and also reacted downwards against the euro to 84.79 from previous weekend's close of 84.51.

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