Rupee closes at 3-month high
The rupee closes at 45.9650/9750 to a dollar due to heavy inflow of foreign funds and poor dollar demand by oil cos.india Updated: Sep 20, 2006 19:40 IST
The rupee on Wednesday shot up to end at a 3-month high of Rs 45.9650/9750 per dollar due to heavy inflows of foreign funds into the domestic stock market along with poor demand for dollar from oil companies after crude fell below the $62 per barrel level.
In active trading at the Interbank Foreign Exchange (Forex) market in Mumbai, the Indian unit opened weak at Rs 46.0850/0950 per dollar as compared to Rs 46.0750/0850 the previous day.
Thereafter, it shot up due to heavy inflow by Foreign Institutional Investors (FIIs) into the stock market and ended at Rs 45.9650/9750 per dollar, a level not seen since June 21.
FIIs, who bought shares worth a whopping $106.40 million on Monday accumulated another $59.40 million on Tuesday, taking the total buying in the last two days of the week to $165.80 million. Last week, FIIs had purchases shares worth $310.30 million, a forex dealer said.
In view of the massive FII buying, the BSE Sensex shot up by 138.67 points to end at 12,109.14 on Wednesday.
Falling oil prices, which put a full stop on dollar buying by oil PSUs was another reason for the sharp rise in rupee, dealers said.
World crude prices fell to fresh six-month lows and New York's main contract, light sweet crude for delivery in October, fell by $2.14 to close at $61.66 per barrel on Tuesday, the lowest since March 21 as softer-than-expected US economic data helped accelerate the recent sell-off. More
In cross-currency trade, the rupee ended firm against the single European unit at Rs 58.27/29 per euro from yesterday's close of Rs 58.34/36 and also firmed up against the British pound to Rs 86.57/59 per pound from Rs 86.68/70 yesterday. However, against the Japanese yen, the Indian unit remained steady at the previous day's level of Rs 39.20/22 per 100 yen.
The Reserve Bank of India (RBI) fixed the reference rate for dollar at Rs 46.05 per dollar from the last level of Rs 46.11. The bank fixed the reference rate for the single European unit at Rs 58.36 per euro from 58.57 on Tuesday. The reference rate for the British pound was fixed at Rs 86.6799 from the last level of Rs 86.7260 and for the yen it was fixed at Rs 39.29 per 100 yen from Rs 39.06 the previous day.
Rupee premia on the forward dollar ended further lower as benchmark six-month payable in February 2007 declined to 23-1/4-24-14 paise from 24-1/4-25-1/4 paise on Tuesday and the far-forwards maturing in August 2007 dropped to 53-54 paise from 54-55-1/2 paise.