Re hits 9-yr high, up 11.5% in '07
The rupee touched a 9-year high on Wednesday, tracking another record peak in the stock market, report BS Srinivasalu Reddy & Agencies.business Updated: Sep 26, 2007 21:22 IST
The rupee touched a 9-year high on Wednesday, tracking another record peak in the stock market, but gains were limited by the Reserve Bank of India (RBI), which was seen buying dollars aggressively, dealers said.
The partially convertible rupee ended at 39.70 per dollar, slipping from an early high of 39.62, its strongest since April 1998, but up from Tuesday's finish of 39.74.
"The central bank would have loved to push the rupee weaker, but had to settle with blocking it — the inflows were really strong," said a senior dealer with a private bank. Finance Minister P Chidambaram said in Washington on Tuesday that the rupee's rise was creating downside risks for the Indian economy.
After market hours on Tuesday, the RBI relaxed rules on the amount of money companies and individuals can send abroad. The apex bank's statement described Tuesday's measures as part of the ongoing efforts to eventually lift curbs on currency transactions and create a fully convertible rupee.
However, analysts said the move was unlikely to effectively counter big capital inflows that have helped the rupee gain about 11.5 per cent this year.
The benchmark Sensex of the Bombay Stock Exchange rose past the 17,000-point level for the first time on Wednesday, up more than 21 per cent since August 21, when it posted its lowest close in three months.
The rupee has risen nearly 2 per cent in the past week, since the US Federal Reserve announced a larger-than-expected cut in its key- lending rate and triggered a worldwide stock market rally.
The Indian currency gained amid hopes that foreign investors would bring in more dollars to profit from the country's booming stock market.