Rupee up by 20 paise on US Fed cut
Rupee on Wednesday shoots up by 20 paise to touch 40.28/29, near its nine-year high, against the US dollar.business Updated: Sep 19, 2007 15:56 IST
Rupee on Wednesday shot up by 20 paise to touch to 40.28/29, near its nine-year high, against the US dollar on expectations of more capital inflows on the back of interest rate cut by the US Federal Reserve last night amid sharp rally in equity markets.
The US Federal Reserve on Tuesday slashed interest rates by fifty basis points to help the economy recover from recent financial turmoil.
According to dealers, this will lead to fresh foreign fund inflows in the domestic market as investors will prefer to invest in high yielding currencies like rupee.
The rate cut affected the dollar sentiment overseas as it touched a fresh record low against euro on Tuesday.
In active trade at the Interbank Foreign Exchange (Forex) market, the local currency opened sharply higher at 40.28/30 a dollar from on Tuesday close of 40.48/49 per dollar and remained steady at higher levels at 40.28/29 a dollar in late morning deals.
Following a Fed impact, the Bombay Stock Exchange benchmark Sensex on Wednesday crossed 16K-mark for the first time. It was up by 447.61 points to 16,116.73 in early trade. The National Stock Exchanges' Nifty also registered its all-time high of 4,677.70.
Borkers expect more capital inflows in near future which will help the rupee to remain buoyant.
Meanwhile, global crude oil prices surged to a record $82.38 a barrel on New York Mercantile Exchange yesterday before settling at $81.51 in the regular session.