Rupee jumps 21 paise to 6-week high Vs dollar on RBI rate hike

Sustained selling of the American currency by banks and exporters amid weak dollar overseas too boosted the rupee sentiment, dealers said.In fairly active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit started slightly lower at 46.38/39 per dollar as against yesterday's close of 46.35/36 a dollar and immediately touched a low of 46.40 on initial weakness in local stocks.

However, it immediately recovered after the announcement of rise in short-term lending (repo) rate by 25 basis points and borrowing (reverse repo) rate by 50 basis points in the Reserve Bank of India's (RBI) first mid-quarterly monetary policy review.

Sustained heavy buying by foreign institutional investors in local equities mainly kept the rupee on strong foot. FIIs picked up shares worth USD 2.3 billion in the current month so far after injecting nearly USD 2.4 billion in August.

The rupee later recovered its initial losses and ended up at 46.14/15, level not seen since August 9, 2010, a rise of 0.45 per cent.The dollar index, consisting of six major currencies, was down by 0.2 per cent and global crude oil was trading above USD 75 a barrel in London today.

Meanwhile, food inflation reached 15.10 per cent for the week ended September 4, the figure not exactly comparable to the previous week's 11.47 per cent because it is calculated on the new series with 2004-05 as the base year.

The rupee premium for the forward dollar ended remarkably higher on fresh paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in February finished up at 111-1/2-113-1/2 paise from 107-1/2-109-1/2 paise from 108-109-1/2 paise on Wednesday and far-forward maturing in August settled strong at 216-1/2-218-1/2 paise from 207-1/2-209-1/2 paise previously.

The Reserve Bank of India has fixed the reference rate for the dollar at Rs 46.30 and the euro at Rs 60.14.In cross-currency trade, the domestic unit rose against the pound sterling and the Japanese yen while declined against the euro.

The rupee firmed up to Rs 72.02/04 paise against the pound sterling from Wednesday's close of Rs 72.09/11 and also hardened against the yen to Rs 53.87/89 per 100 yen from Rs 54.38/40 previously.

It, however, moved down against the euro to Rs 60.37/39 per euro from its last close of Rs 60.13/15

DH Newsletter Privacy Policy Get top news in your inbox daily
GET IT
Comments (+)