Rupee rebounds by 53 p to 60.19 on lower current account gap
A sharp moderation in CAD and strong equities helped rupee rebound by 53 paise, its best single-day gain in a fortnight, to end at 60.19 against dollar.business Updated: Jun 27, 2013 19:14 IST
A sharp moderation in CAD and strong equities helped rupee rebound by 53 paise, its best single-day gain in a fortnight, to end at 60.19 against dollar.
Fresh dollar selling by exporters on hopes of fall in the USD after downward revision to that country's first quarter GDP growth also helped rupee recover as hopes surfaced that the Fed may delay the plan to taper of monetary stimulus.
At the Interbank Foreign Exchange (forex) market, the domestic unit resumed higher at 60.45 a dollar from previous all-time closing low of 60.72.
Later, it touched a low of 60.63 but with March quarter Current Account Deficit (CAD) coming at 3.6 per cent against expectations of 4.4 per cent, the rupee rallied. It rebounded to a high of 60.10, before concluding at 60.19, rise of 53 paise or 0.87 per cent -- its best rise since June 12 (60 p).
Yesterday, it had plunged by a whopping 106 paise or 1.78 per cent as month-end dollar demand demand surged.
"Release of the balance of payments data two days ahead of schedule suggests that the RBI is trying to calm markets following USD/INR breaching 60 yesterday evening," said Sonal Varma, India economist, Nomura.
CAD moderated sharply to 3.6 per cent for March quarter from 6.7 per cent in the previous quarter, but overall CAD for FY'13 stood at at 4.8 per cent, versus 4.2 per cent in FY12.
There was no sign of support on capital inflows front as FIIs pulled out over Rs 1,000 crore from stocks (cash) today.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said that rupee bounced back from yesterday' fall and managed to trade strong against dollar taking cues from local equity markets which closed up by over one & half per cent.
"Tomorrow India will come out with its Foreign Debt and Forex Reserve data which will clear the picture regarding CAD issue. Trading range for the spot Rupee is expected to be within 59.90 ? 60.60." Dollar index was up by a mere 0.02 per cent against a basket of six global currencies ahead of release of US consumer spending and labor-market figures which could affect the Federal Reserve's policy outlook.