The rupee got a boost from the US Fed move to continue with its monetary stimulus programme.

The Indian unit jumped to a one-month high of 61.77 to a dollar on expectations that some of the funds from the US monetary stimulus will find its way into emerging markets such as India.

The rupee opened 2.5 per cent higher at 61.80 to a dollar from Wednesday’s close of 63.38.

The unit declined to 62.08 on mild outflows in the first session of trade but recovered to 61.64 on heavy inflows and positive domestic and global equity markets.

The US Fed chief said the Fed could still begin reducing its bond-buys, which are aimed at holding down long-term interest rates, in the next three months but only if the outlook for the US economy strengthens.

Ashok Gautam, Senior Vice-President and Head Global Markets, Axis Bank, said: “The rupee will remain at 61-63 levels with an upward bias towards 60 a dollar.

“However, the RBI must not allow the rupee to appreciate much as it could affect our exports.”

(This article was published on September 19, 2013)
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