Indian rupee rises 9 paise to 62.28 vs US dollar; best weekly gain in nine

Written by PTI | Mumbai | Updated: Feb 7 2014, 23:57pm hrs
Indian rupeeThe Indian rupee today appreciated by nine paise to end at 62.28 against the US dollar on sustained selling of the US currency. Reuters
The Indian rupee today appreciated by nine paise to end at 62.28 against the US dollar on sustained selling of the US currency by exporters and positive trends in stocks, helping it wrap up its best week in nine.

Other factors like volatility ahead of US non-farm payrolls data and hopes of inflows linked to Vodafone deal and ongoing spectrum auction, also helped the local currency mostly trade in the green today, said forex traders.

At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed higher at 62.30 a dollar from last close of 62.37 and moved in a narrow range between a high of 62.25 and a low of 62.42.

The rupee finished at 62.28, logging a rise of nine paise or 0.14 per cent over Thursday's close. Today's closing is the rupee's highest since 61.93 on January 23, 2014.

Yesterday, it has gained 20 paise or 0.32 per cent.

On a weekly basis, the rupee jumped 40 paise -- its best since the week ended December 6, 2013 when it rose 103 paise.

"It was a strong session for rupee which was seen breaking its earlier range of past seven sessions. Gains were supported by dollar selling and positive stock markets...there was cautiousness ahead of the key Non-Farm Payrolls data from the US," said Abhishek Goenka, CEO, India Forex Advisors.

A better-than-expected US jobs data is likely to add to fears that the US Federal Reserve will further taper its USD 65 billion a month bond buying programme.

The Indian benchmark S&P BSE Sensex today gained 65.82 points or 0.32 per cent, ahead of advance growth estimates.

After stocks and forex market closed, government pegged economic growth rate for 2013-14 at 4.9 per cent against 4.5 per cent in 2012-13.

The dollar index, a gauge of six major global rivals, was up by 0.09 per cent. Pramit Brahmbhatt, CEO, Alpari Financial Services, (India) said: "Dollar index is trading week but is expected to strengthen in coming days on tapering which will depreciate rupee and may force it to trade near 63.00 levels." The telecom spectrum auction entered the 33rd round of bidding today after starting off from the Rs 52,689 crore mark this morning.

Yesterday, UK-based Vodafone had secured approval of the Cabinet to buy out minority shareholders in its Indian arm for Rs 10,141 crore, the single largest foreign investment in the country's telecom sector.

These developments are expected to lead to capital inflows in the days ahead, say analysts.

Meanwhile, forward dollar premiums recovered on fresh payment pressure from banks and corporates.

The benchmark six-month forward dollar premium payable in July gained to 243-245 paise from 242-244 paise previously.

If the forward exchange rate for a currency is higher than the spot rate, there is a premium on that currency.

Far forward contracts maturing in January moved up to 486.5-488 paise from 484.5-486.5 paise.

The RBI fixed the reference rate for the dollar at 62.3155 and for the euro at 84.6830.

The rupee fell back to end at 101.77 against the pound from last close of 101.54 and also reacted downwards to 84.51 per euro 84.36.

However, it remained firm to 61.00 per 100 Japanese yen from its previous close of 61.45.