STOCK India rupees
It's been quite a week for the rupee, during which it dropped to 21.80 and then hovered around 21.75 levels. Today's 21.63/21.66 levels thus qualifies as a mini-correction, but will this last? Image Credit: Ahmed Ramzan/Gulf News

Dubai: The Indian rupee firmed up early on Thursday to 21.63 against the dirham, boosted in part by data that shows the country’s economy growing at its fastest in the April-June period. The rupee had been in the 21.75/21.76 range and had briefly dropped past 21.80 this week, while Wednesday (August 31) on account of Ganesh Chaturthi.

“Today’s rise should only be seen as a mini-correction and it’s highly unlikely that the lift will see the rupee firm up anywhere near 21.45 levels,” said an FX analyst. “Expats wishing to remit could wait 24-48 hours to see whether the rupee would drop back to 21.70 plus levels.

“Today’s correction, we feel, will be a short-lived one despite the news about GDP numbers.”

According to local currency exchange houses, the last two days of August had seen better than average dirham-to-rupee remittances. But given today’s strengthening, Indian expats in the UAE might decide to wait longer for trends to become clearer.

As such, “There will still be higher remittances in the next few days because of key festivals such as Onam,” said a senior treasury analyst. “So, it becomes a question of being patient for the right exchange level.”

Stocks drop

India’s stock markets, however, have not gotten much of a boost by way of the GDP numbers – early Thursday, the key Sensex benchmark is down 269 points after having dropped 600 points. "Despite the high growth between April to June, there's the concern that high inflation might still upset forecasts," said a stock trader. "The RBI will definitely be looking at further rate hikes to cool down consumption - and that will telll on GDP growth through the rest of this year."