The Indian rupee rose by 41 paise on Monday to near a five-week high of Rs. 45.75/76 against the dollar amid the American currency losing ground against its rivals.
Dealers said rupee took the cue from overseas markets, where the dollar tumbled following China’s steps to let the yuan gain against the American currency.
The rupee resumed higher at 45.70/71 a dollar on the Interbank Foreign Exchange market against its last close of 46.16/17.
It later moved in a range of 45.58 and 45.77 before settling the day at 45.75/76, a rise of 0.89 per cent.
Dealers said with dollar falling in Asia, the possibility of capital inflows increased, making the local currency stronger.
After pulling out nearly USD 2.04 bln in the last month, Foreign Institutional Investors (FIIs) have invested about USD 1.6 bln in the current month till June 17.
The Indian benchmark Sensex today ended up by a whopping 305.73 points, or 1.74 per cent.
The rupee premium for the forward dollar reacted downwards on fresh receivings by exporters.
The benchmark six-month forward dollar premium payable in November settled lower at 68-70 paise from 72-74 paise last Friday and far-forward maturing in May also finished sharply down at 123-125 paise from 131-1/2-132-1/2 paise previously.
The Euro and Australian dollar were the biggest currency-market winners in Asian trading today, following China’s weekend announcement that it will gradually loosen its de-facto peg to the US dollar.
The weak dollar overseas also weighed on the American currency, as exporters are believed to have sold it expecting a further fall.
Meanwhile, global crude oil prices were trading near USD 79 a barrel in London today.
The Reserve Bank of India fixed the reference rate for the dollar at Rs. 45.64 and for the euro at Rs. 56.83.
In cross currency trade, the domestic currency remained firm against the pound, the euro and the Japanese yen.
The rupee improved further against the pound to end at Rs. 67.91/93 per pound from last Friday’s close of Rs. 68.28/30 and also rose against the euro to Rs. 56.70/72 per euro from Rs. 57.11/13 previously.
It also strengthened against the yen to Rs. 50.10/12 per 100 yen from its last close of Rs. 50.38/40.
