Extending its gains for the fourth straight session, the rupee gained 15 paise to close at a fresh two-month high of 44.42/43 against the US currency following heavy capital inflows amid sustained sale of dollars.

Dealers said that fund flow from foreign institutional investors (FIIs), in strong local equities, soared which mainly supported the rupee sentiment. Continued dollar selling by exporters and a few banks too helped the rupee rally, they added.

At the Interbank Foreign Exchange (Forex) market, the domestic currency started firm at 44.50/51 a dollar from the last close of 44.57/58. Later, it moved in a wide range of 44.35 and 44.55 before settling at 44.42/43, showing a net gain of 0.34 per cent.

Alpari Financial Services (India) CEO Pramit Brahmbhatt said, “The rupee appreciated by over 0.3 per cent against the USD and ended at a 2-month high, as local equities closed up.”

The dollar index was up by 0.15 per cent against its major rivals and New York crude oil was trading above USD 95 a barrel in European market on Monday.

Meanwhile, the Bombay Stock Exchange benchmark Sensex almost regained the 19,000 mark in early trade but lost the steam to end the day only 52 points up in choppy trading.

FIIs pumped in more than USD 1.5 billion in seven trading sessions in a row since June 23. India Forex Advisors CEO Abhishek Goenka said, “The rupee gained tracking other Asian peers, Thailand’s baht gained the most since February 2008 and shares climbed after an election victory of exiled former Premier Thaksin Shinawatra raised prospects of foreign investors returning to the nation.”

The rupee premium for the forward dollar remained firm on persistent paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in December concluded higher at 146-148 paise from last weekend’s close of 143-1/2-145-1/2 paise.

Far-forward contracts maturing in June also ended up at 256-258 paise from 251-253 paise previously. The RBI has fixed the reference rate for the dollar at Rs 44.4595 and the euro at Rs 64.6250.

The rupee reacted downwards against the pound sterling to end at Rs 71.51/53 from last Friday’s close of Rs 71.33/35 while improved further to Rs 64.48/50 per euro from Rs 64.60/62 previously. It also moved up against the Japanese yen to Rs 55.04/06 per 100 yen from last close of Rs 55.20/22.

Keywords: USD-INR rate

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