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Indian rupee gains 1% as sentiment improves
The Indian rupee rose more than one per cent on Friday as large dollar sales by some foreign banks, probably on behalf of their customers, and a sharper than expected fall in inflation boosted sentiment.
- Reuters
- Published: 23:47 January 9, 2009
Mumbai: The Indian rupee rose more than one per cent on Friday as large dollar sales by some foreign banks, probably on behalf of their customers, and a sharper than expected fall in inflation boosted sentiment.
The partially convertible rupee closed at 48.27/29 per dollar, 1.1 per cent stronger than its previous close of 48.80/81 on Wednesday.
"There was heavy dollar selling today by foreign banks, may be on behalf of their customers," said V Kumar, chief dealer at State Bank of Travancore. "The drop in inflation also helped to a large extent."
"The rupee should trade in a broad range of 48 to 49 next week," he said.
Indian inflation fell more than expected to a 10-month low in late December and is seen heading sharply lower on the back of an expected fuel price cut, giving authorities greater freedom to prop up stumbling growth.
Dealers said the market had expected stocks to plunge for another session after dropping more than seven per cent on Wednesday as revelations about massive fraud at Satyam Computer Services emerged and ruined investor sentiment.
However, more modest losses were seen as positive for the currency. Indian shares fell nearly two per cent to their lowest close in a month.
Foreign funds sold a net $20 million worth of Indian shares in the first five trading sessions of 2009, after dumping a net $13 billion last year.
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