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Rupee scales 3-month high against US dollar

The Rupee surged by another massive 26 paise to scale a near three month closing peak of Rs 44.77/79 per dollar.

business Updated: Jan 04, 2006 19:40 IST

Despite suspected central bank dollar buying intervention, the Rupee on Wednesday surged by another massive 26 paise to scale a near three month closing peak of Rs 44.77/79 per dollar.

The high is driven by robust FII inflows into the booming stock market on the back of a sliding dollar overseas.

In choppy trade at the interbank Foreign Exchange (Forex) market, the Rupee opened distinctly firm at Rs 44.77/78 per dollar, but corrected downwards to Rs 44.86/88-dollar on dollar purchases by state-run banks, possibly on behalf of the central bank to curb sharp gains.

Heavy dollar supplies from trade and FII inflows, however, drove the Rupee once again to multi-week peaks of Rs 44.75/77, before settling at a near 3-month closing high of Rs 44.77/79 per dollar, dealers said.

Rupee gained four paise on Tuesday following a global weak dollar, which tumbled further overnight in overseas business after the minutes of the FOMC meeting suggested at a possible halt to interest rate increases.

Public sector banks normally buy/sell dollars at the behest of the Reserve Bank of India (RBI) to curb excessive volatility in the currency markets and to prevent sharp swings either-way.

Notwithstanding rising crude oil prices, the Rupee continued to scale new multi-week peaks on the back of strong portfolio investment inflows into the booming stock market amid a plunging dollar overseas, a Forex dealer said.

The BSE Sensex on Wednesday crossed the 9600 mark for the first time ever and soared by a whopping 109 points to end at a new peak of 9648.08, buoyed by hectic foreign funds buying and purchases by local operators.

First Published: Jan 04, 2006 19:40 IST