Rupee rises on strong equities

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The rupee ended at over a week’s high of 54.29 against the dollar tracking the domestic equity market and a stronger euro. On Thursday, the Indian unit had closed at 54.56. After opening at 54.48 a dollar on Friday, the rupee declined to a low of 54.56 in early trades on the Interbank Foreign Exchange market. However, it recovered to 54.27 on heavy capital inflows. The Government raised $56.84 million by selling some of its shares in state-run Rashtriya Chemicals and Fertilisers Ltd, an agency report said.

Further, expectations of share sale from a government-owned power company and hopes of a rate cut by the central bank in its March 19 monetary policy review boosted the sentiment in favour of the rupee.

“The rupee strengthened due to capital inflows and the over 100 basis points rally in the euro,” said chief dealer with a public sector bank. The 30-share BSE-benchmark Sensex rose 270 points or 1.40 per cent to end at 19,683 at market closing.

Call up, bonds decline

After opening flat from its previous close of 7.85 per cent on Thursday, the inter-bank call money market ended lower at 7.70 per cent. Intra-day, it moved in the 7.60-7.85 per cent range. The widely traded 8.15 per cent government security, which matures in 2022, closed higher at Rs 101.99 from its previous close of Rs 101.85, while the yields declined to 7.83 per cent from 7.86 per cent.

(This article was published on March 8, 2013)
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