The rupee on Monday strengthened by 65 paise to close at a one-month high of 62.83 against the dollar, on the hopes of prolonged easy monetary policy in the US after Lawrence Summers quit the race to be the new US Fed chief.
“The rupee started the week with gains against dollar after the exit of Summers, who was perceived as pro-tapering, exited from the race for Fed president,” said Jayant Manglik, president, retail distribution, Religare Securities.
The rupee opened at 63.70 per dollar on Monday from 63.48 on Friday but recovered to 62.45 before ending at 62.83 per dollar, posting a gain of 1%. It was the highest level for the rupee since closing at 61.65 on August 16.
The rupee’s gains were trimmed after wholesale price inflation (WPI) for August came in at 6.1% from 5.79% in July, raising concerns the RBI would find it difficult to lower rates. WPI inflation is a major input for the RBI for deciding the monetary policy stance which will be reviewed on September 20.