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Rupee gains further ground

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Absence of dollar demand boosts sentiment

MUMBAI: The rupee closed at a fresh 9-1/2 year high of 39.3100/3150 against the greenback on Wednesday, dearer by 13 paise from Tuesday’s 39.44/45 on consistent portfolio inflows into equity markets.

The rupee sentiment was also boosted by the absence of dollar demand from banks as well as oil corporates.

In quiet active trading at the interbank foreign exchange market, the rupee moved in a range of 39.30 and 39.38 after resuming firm at 39.32/34 a dollar due to lack of any intervention by the central bank to cap the rupee’s surge.

The rupee last hit the 39.30-level on February 26, 1998.

Reports that the Institute of Economic Growth expected the Indian unit to depreciate to 40.50 to a dollar in the next three months, mainly due to widening trade deficit, failed to have any desired impact on the rupee movements. Traders, however, feel that the Indian currency could touch 39 level in the near future due to unceasing portfolio inflows in the last fortnight. The inflows amounted to $16 billion so far in 2007, highest in any single year. — PTI


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