Indian rupee at over 2-week high, up 8 paise at 61.23 against US dollar

Written by PTI | Mumbai | Updated: Oct 31 2013, 01:20am hrs
Indian rupee'Indian rupee was also supported by sharp rally in the local stock markets' (AP)
The Indian rupee added another 8 paise to end at 61.23 against the dollar, the highest level in more than two weeks, as the US currency traded stable ahead of the outcome of Federal Reserve's meeting today and as domestic shares surged to a record.

The Indian rupee also got support from fag-end sales of dollars by banks and exporters on the back of sustained foreign capital inflows. Reports said RBI Governor Raghuram Rajan told analysts the central bank may have done enough with rate hikes for now and would wait for their impact on the economy.

The Indian rupee resumed lower at 61.40 per dollar against the previous close of 61.31 at the interbank foreign exchange market and moved down further to 61.60 per dollar on initial month-end dollar demand from importers.

However, it recovered on dollar sales in view of the strong local equity market to close at 61.23, a gain of 8 paise or 0.13 per cent. It was the highest level for the local currency since October 11, when it closed at 61.07.

"It started gaining strength after the RBI Governor said that they have done enough, given what they know about the economy, and to wait and watch and see what happens. This suggested that there is little room for further rate hikes. Indian rupee was also supported by sharp rally in the local stock markets," said Abhishek Goenka, CEO of India Forex Advisors.

In the global market, major currency pairs were moving sideways.

"The dollar index, which measures the US currency's value against a basket of six major currencies, is trading almost stable ahead of the release of the Federal Reserve's latest policy statement," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).

The benchmark 30-share S&P BSE Sensex surged 105 points, or 0.5 per cent, to an all-time closing high of 21,033.97.

Overseas funds continued their buying spree and invested a net Rs 1,103.04 crore in shares yesterday, according to provisional data from the stock exchanges.

Forward dollar premiums closed lower on sustained receipts from exporters.

The benchmark six-month forward dollar premium payable in March eased to 205-207 paise from 207-1/2-210-1/2 paise and far-forward contracts maturing in September softened to 432-434 paise from 433-436 paise.

The RBI fixed the reference rate for the dollar at 61.4871 and for the euro at 84.4855.

The Indian rupee improved to 98.39 against the pound from 98.56 previously and edged up to 84.26 per euro from 84.34. It gained to 62.34 per 100 Japanese yen from 62.67.