The Indian rupee continued to rule firm for the fourth consecutive week, surging another 45 paise to end at 61.42 against the American currency on persistent selling of dollars by banks and exporters amid sustained foreign capital inflows into equity market.
Banks and exporters preferred to reduce their dollar position on hopes of further capital inflows as Foreign portfolio investors (FPIs) infused 733.98 million US dollars during the week as per the SEBI’s record.
The rupee opened higher at 61.60 per dollar as against the last weekend’s level of 61.87 per dollar the Interbank Foreign Exchange (Forex) market and hovered in a range of 61.3650 and 61.9100 before ending at 61.42 per dollar, showing a gain of 45 paise of 0.73 per cent.
The domestic currency has risen by 215 paise or 3.38 per cent in the four weeks.
The Indian benchmark sensex rose further by 1156.45 or 4.11 per cent to end at 29,278.84 on sustained buying in view of European Central Bank (ECB) decision about keeping interest rates unchanged and announcement of bigger-than-expected stimulus programme.
Pramit Brahmbhatt, Veracity Group CEO said,” Rupee continued to appreciate for the fourth week in a row and closed at 61.42 as local equities traded strong and closed all time high for the week. Rupee is expected to appreciate further taking cues from the positive sentiments in the market generated by the ECB stimulus, but importers will enter in the market to grab the advantage of appreciated Rupee which will keep Rupee under pressure.
RBI is also expected to step in as too much Rupee appreciation would hurt exports, he added.
The rupee premiums on forward dollar dropped further on persistent receiving by exporters.
The benchmark six-month forward dollar premium payable in June dropped to 192-194 paise from the last weekend’s level of 199.5-201.5 paise while far-forward contracts maturing in December moved up marginally to 395.5-397.5 paise from 395-397 paise.
The RBI fixed the reference rate for the US dollar at 61.4988 and 69.6166 respectively as against the previous weekend’s level 61.8933 and the euro at 72.0067.
The rupee also rallied further to 92.00 per pound from from the preceding weekend’s level of 94.07 and also shot up against the euro to 68.94 from 71.66. It firmed up to 51.96 per 100 yen from 53.02 last week.