Unabated foreign portfolio investments and trade inflows fuelled the rupee's dream run against the dollar for the third straight year with the domestic currency maintaining a firm poise in 2004, notching up a sharp gain of 4.22 per cent, helped largely by a lingering weak dollar overseas.
Notwithstanding a lower GDP growth of six to 6.5 per cent due to the erratic monsoon conditions, flaring global oil prices and a fair sprinkling of political uncertainties, the rupee held firm as a rock owing to the strong economic fundamentals, dealers said.
Although the rupee appreciation was lower than last year's record 5.32 per cent rise, the gain was on the back of a higher base year, which should not mitigate the sterling performance of the currency in 2004, driven up mainly by sustained heavy FII inflows into the booming stock markets.