Starting the new year on a highly bullish note, the rupee surged ahead to close at a fresh five-month high of 63.68 a dollar, gaining 19 paise against its U.S. counterpart. This is the highest closing for the home currency since August 8 last year when it had settled at 63.63.
Continuing its winning streak, the rupee has strengthened by a solid 47 paise in last three sessions.
Frantic dollar unwinding by banks and exporters in the face of extremely bearish sentiment for the greenback overseas largely supported the big rupee move despite a fall in local stocks and growing concerns with regard to fiscal deficit.
Expectations of robust capital inflows into the country on the back of relevant economic policy measures also kept forex market undertone highly buoyant.
Forex reserves
In the meantime, India’s foreign exchange reserves surged by $3.53 billion to touch a new life-time high of $404.921 billion in the week to December 22, aided by an increase in foreign currency assets, RBI data showed.
The rupee had risen almost 6% against the U.S. dollar in 2017 driven by strong inflows into capital markets.
