Forex

At 49.34/$, rupee rises to 11-week high

Sneha Padiyath Mumbai | Updated on March 12, 2018 Published on January 27, 2012

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rupee

Increased capital inflows along with expectation of rate cuts from the RBI saw the rupee touching a 11-week high of Rs 49.34 a dollar. The rupee appreciated by 1.6 per cent from its previous close of Rs 50.1 on Wednesday.



Dr Brinda Jagirdar, General Manager, SBI, said this reflected the improved market sentiment riding on increasing capital inflows and clear signal by the RBI that it is ready to begin its rate-cutting cycle at the opportune time.



She said, “The injection of liquidity into large European banks by the ECB has also reassured markets that capital flows from the region will not dry up anytime soon.”



The rupee opened the day at Rs 49.6, and touched a high of Rs 49.8 and low of Rs 49.3.



The rupee hit Rs 54.30/$ on December 15, 2011, and has appreciated about nine per cent since then.



“The reversal from 54.30 was triggered by the RBI cutting out abnormal dollar demand and pulling in supplies from FIIs/NRI investors. Higher forex premium is also keeping the forward market in dollar supply-driven. Now, the shift of the RBI into growth supportive monetary stance will attract FII flows into the equity market,” said Mr Moses Harding, Head - Global Markets Group, IndusInd Bank.



According to data on the SEBI Web site, FIIs have been net buyers since the beginning of the year at Rs 1,062.70 crore.



>sneha.p@thehindu.co.in

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Published on January 27, 2012
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