The Hindu Business Line : Rupee breaches 44-mark to touch 8-month high

The domestic currency had last seen similar closing levels on April 12, when it had ended at 43.64/65 per dollar. A higher finish was seen on March 31 at 43.60/65, when the rupee had touched nearly a four-year closing high.

Huge foreign investment inflows in addition to export-related dollar sales coupled with weakening of the dollar against other international currency majors helped this surge of the rupee. Dealers said that in Monday's trade alone FIIs invested nearly $50 million to $1 billion across Indian markets.

"Today, Reserve Bank of India did not intervene in the forex market. The absence of active buying by nationalised banks, therefore, helped the upsurge of the rupee," said a dealer. This factor, according to dealers, was critical in driving the rupee to its high on Monday.

"It was a one-way streak upward for the home currency today, as it witnessed a huge movement of nearly 50 paise since its previous finish," said a dealer at a leading private sector bank. The upswing of this quantum was not seen for the past four or five months, she added. The domestic currency had finished at 44.12/14 per dollar on Friday. Since last month, the rupee has witnessed a whopping appreciation of nearly Rs 1.50.

Another reason aiding the sharp upward movement of the home currency was falling prices of crude oil internationally.

"Selling pressure on the dollar was not only due to local inflows and strengthening of the euro and other currencies against the dollar, but also because stop losses for several banks were triggered at these levels," added a dealer at private sector bank.

"This one-way movement of the rupee is likely to continue, with the next support level seen at 43.30, `' he added.

Forward premia ended slightly softer as the six-month annualised premium finished at 1.53 per cent (1.58 per cent) while the twelve-month premium ended at 1.07 per cent (1.15 per cent).