Rupee Strengthens to Over One-Week High
February 26, 2013 2:39 AM EST
The rupee strengthened to its highest level in over a week on Monday, boosted by dollar sales by custodian banks, positive sentiment ahead of the upcoming budget and heavy dollar selling in the non-deliverable forwards market.
Investors are increasingly hopeful the government will, in its budget on Thursday, announce measures to attract more foreign fund flows into the country.
Net inflows into the country's equity market have been a key determinant of the rupee's fortunes in recent years. Foreigners have so far this year bought $8.4 billion worth of local shares after purchasing $24.55 billion in 2012.
"I expect a positive week for the rupee and think it will appreciate towards 53.50 this week," said Samir Lodha, managing director at QuantArt Market Solutions.
"Pre-budget expectation build-up will help on the domestic front," he added.
The partially convertible unit closed at 53.8650/8750 per dollar, after touching 53.86, its strongest since February 15. The unit had closed at 54.1750/1850 on Friday.
Traders said gains in the domestic sharemarket also helped the rupee. Indian shares ended marginally higher after touching their lowest in 2013 intraday as technology firms such as Infosysgained on hopes the budget would provide incentives to exporters.
However, continued dollar demand from oil refiners, the largest buyers of dollars in the domestic currency market, to meet month-end import commitments limited further gains in the rupee.
"NDFs have been seeing heavy dollar selling pushing the USD/INR down locally as well. But good demand from oil limited a further downside," a senior dealer with a state-run bank said.
The spot non-deliverable forward was mostly stronger than the onshore spot rate through the session, dealers said. The spot NDF closed at 54.97 while the most-traded one-month NDF ended at 54.26.
In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 53.87 with a total traded volume of around $8 billion.
Most Popular Slideshows
- Flight MH17 Attack: Russians Claim 'Putin A Terrorist,' Memorial at Dutch Embassy Overflows [PHOTOS]
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
Join the Conversation
- Australian Stock Market Report – Midday July 23, 2014
- Major European & U.S. Airlines Cancel Flights to Israel after Rocket Attack on Tel Aviv Airport
- Alibaba Okays Yahoo Request to Sell 140 Million Shares Via IPO, 68 Million to Be Sold to Shareholders
- Australian Stock Market Report – Midday July 24, 2014
- Australian Stock Market Report –Afternoon July 24, 2014
- Samsung Galaxy Note 4 Apps Leak Online, Five Fresh Features to Expect from the Android Smartphone
- Moto 360 Price Speculations, Key Features, Strategic Release Date, Design: A Watch That is More Than Just Time
- Windows Phone 8.1 Update Rollout: 20 Nokia Lumia Phones Eligible and 13 New Features to be Added
- Three New Moto G Successors Spotted in FCC Document Dubbed Moto G2, Moto M and More --Reports
- iPad Air 2 Release Date Will Skip IGZO Panel; To Rollout with Super-Slim iPad Mini Air
- Upcoming iPad Mini 3 Could be 30% Thinner and Likely be Called iPad Mini Air; Apple Q3 Results Show 9% Decrease in iPad Sales
- HTC Google Nexus 8 Release Date Imminent with New Nexus 7 Deals, Two New Tablets Soon