Re near 10-yr high vs dollar on expectation of inflows

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The rupee came off from near its 10-year higher levels but still ended strong by five paisa at 39.29/30 against the US dollar on expectations of heavy allocation of foreign funds in near future in IPOs and smart recovery in the equity markets.

In active trade at the Interbank Foreign Exchange (Forex) market, the local unit opened steady at 39.33/35 a dollar from Friday’s close of 39.34/35 a dollar.

Later, it improved further to intra-trade high of 39.20 a dollar just near its previous 10-year high of 39.16 a dollar attempted on November 7, 2007.

But, intervention by the apex bank at the rupee’s higher levels weighed on the domestic currency and it fell back to settle the day at 39.29/30 a dollar, still higher than last close. The closing was also near a decade high.

It had ended at 38.90 a dollar on February 19, 1998.

The rupee garnered 14 paisa or 0.36 per cent in last three straight sessions.

Dealers attributed smart rally in the rupee despite weak Asian stock indices to expectations of heavy capital inflows in the Initial Public Offerings (IPOs), including Reliance Power, later this month.

Anticipation of good Q3 corporate results to be announced this weekend also had a sentimental impact on the rupee.

Smart recovery in the benchmark, Sensex, which finished up by nearly 126 points, also later aided the rupee sentiment.