The rupee ended 10 paise stronger at 54.27 against the greenback on Thursday due to dollar selling by exporters and increased capital flows. Tthe currency unit opened weaker at 54.43 from Tuesday’s close of 54.37 in the Interbank Foreign Exchange market.
It touched a low of 54.46 in early trades as the American currency strengthened.
Further, increased month-end demand for the dollar from importers put pressure on the rupee to some extent.
However, the rupee recovered to 54.27 in the afternoon trading session as the dollar started weakening.
“The rupee surged on dollar selling and inflows as today was the last day of trading for the week and month,” said a dealer with a public sector bank.
India’s current account deficit (CAD) widened to a record high of 6.7 per cent of GDP in Q3 (from 5.4 per cent in Q2), driven mainly by larger trade deficit, which widened to $ 59.6 billion in Q3 of 2012-13 from $48.6 billion in the year-ago period, the Reserve Bank of India said. This may push the rupee downwards to trade in the range of 54.50 to 55 levels in the week ahead, said Ashish Parthasarthy, Head of Treasury, HDFC Bank.
However, the impact may be limited as the CAD figure was expected to be above 6 per cent levels. Also, the RBI has indicated that with the surge in capital inflows, mainly due to foreign portfolio investment, CAD during the quarter could be fully financed.