The rupee ended flat on Wednesday at 59.90 against the dollar after surrendering initial gains on mild dollar selling by exporters.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced higher at 59.80 a dollar from last weekend’s close of 59.91.
It shot up further to touch an eight-month high of 59.50 on sustained capital inflows. Dealers said initial dollar selling by exporters and strong local equities helped the local currency rise.
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It finally ended at 59.90, showing a mere gain of a paisa from its previous close with exporters selling dollar.
The BSE benchmark index today gained 105.05 points to end the day at new high of 22,551.49. Foreign institutional investors (FIIs) bought shares worth a net Rs 385.66 crore on Tuesday, as per provisional data from stock exchanges.
“Bunched up inflows, largely from FIIs looking to buy Indian equities, was the primary reason behind the rupee’s rise today. The central bank was heard to be paying on the forward, probably unwinding some of the forward sales it had contracted last year.
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“As a result, the 12-month forward is quoting at 513/516 paise, highest level since mid-August of last year,” said Anindya Banerjee, Currency Analyst, Kotak Securities.
Forward dollar premium improved on sustained payments from banks and corporates.
The benchmark six-month premium payable in September edged up to 258.5-260.5 paise from 258-260 paise previously.
Far forward contracts maturing in March, 2015 also moved up to 509.5-511.5 paise from 507-509 paise.
The Reserve Bank of India fixed the reference rate for dollar at 59.64 and for the euro at 82.39.
The rupee fell back against the pound to 99.69 from last Friday’s close of close of 99.56. It ended lower at 82.57 per euro from 82.27.
However, it strengthened at 57.77 per 100 Japanese yen from last weekend’s level of 58.54.