The rupee regained some of its lost value against the dollar on Friday to close at 65.70/71 per dollar compared to its previous close of 66.55/56 on Thursday.
The Reserve Bank of India (RBI) decision to allow the public sector oil marketing companies to approach a mandated bank for their foreign currency requirements on a currency swap basis helped the demand move away from the spot market. “This is a positive step, and the markets reacted favourably,” said N.S. Venkatesh, Chief General Manager, Treasury, IDBI Bank.
The rupee also strengthened due to the supply of dollar by some foreign banks, indicating interest of corporates, who were exporters, to bring in their dollar receivables, said Mr. Venkatesh.
The equity and bond markets also turned positive on Friday, which helped sentiments in the foreign exchange market. Yields on the benchmark 10-year Government Securities (G-Sec) have come down from 8.78 per cent to 8.60 per cent on Friday. “With the Government and the RBI taking various steps, the market sentiments have turned positive,” he added.
Tracking a rebound in the rupee’s value against the dollar, stock indices surged on Friday with the Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex) gaining 218.68 points to close at 18619.72.
The rally was led by consumer durables stocks with a gain of 1.90 per cent, followed by health care and banks (1.59 per cent each), information technology and fast-moving consumer goods (1.54 per cent each) and technology (1.44 per cent).
On National Stock Exchange (NSE), the 50-share Nifty closed at 5471.80, with a gain of 62.75 points. “ Key commodities, crude and gold, have rallied for the week,” said Dipen Shah, Head of Private Client Group Research, Kotak Securities.
