Tuesday, 11 March 2014 01:01
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REUTERS: The rupee rallied to its highest level in seven months on Monday as foreign investors continued to buy into both equities and debt, even as most other Asian currencies fell after surprisingly weak Chinese trade data.
Strong dollar selling by custodian banks on behalf of foreign investors forced exporters to also step up their greenback sales.
However, momentum could wane in the near-term for the rupee ahead of consumer inflation and industrial output data due on Wednesday. Trade data could also be released this week, although no date has been fixed yet.
“The rupee initially was caught between the US non-farm payrolls data and the Chinese trade numbers but custodian banks started selling aggressively in late trade,” said Pramod Patil, Head of Foreign Exchange and Fixed Income Trading at United Overseas Bank.
The partially convertible rupee closed at 60.85/86 per dollar compared with 61.08/09 on Friday. The unit rose as high as 60.79, its strongest since 12 August.
The rupee benefited after Indian shares again hit all-time highs on Monday, although both the Sensex and Nifty indexes ended the day with only slight gains.
Foreign investors bought a net 25.77 billion rupees of shares on Friday, their biggest daily purchase since 9 December. That marked their 16th consecutive buying session for a net total of about $ 1.4 billion.
For the year, overseas funds have bought a net $ 852.10 million in equities and $ 5.6 billion in debt.
The gains contrasted with falls in most Asian currencies on Monday after Chinese trade data added to worries of a slowdown in the world’s second-largest economy.
