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Indian rupee jumps on PM's reassurance, at 65.70 against US dollar

The Indian rupee got a boost from Prime Minister Manmohan Singh's assurances in Parliament on combating the currency's fall, gaining 85 paise to close at 65.70 against the US dollar.

BT Online Bureau   Mumbai     Last Updated: August 30, 2013  | 18:51 IST
Rupee gets PM boost, up 85 paise to 65.70

The Indian rupee got a boost from Prime Minister Manmohan Singh's assurances in Parliament on combating the currency's fall, gaining 85 paise to close at 65.70 against the US dollar.

Singh while addressing the Rajya Sabha on Friday said: "Sudden decline in exchange rate is certainly a shock, but we will address this through other measures, not through capital controls or by reversing reforms."

At the same time, he said, "to some extent depreciation can be good for the economy as this will help to increase our export competitiveness and discourage imports."

Singh was confident growth in FY14 will rise to 5.5 per cent from a decade's low of 5 per cent in 2012-13.

At the Interbank Foreign Exchange Market, the local currency resumed at 67 from the previous close of 66.55 and dropped to a low of 67.43 on initial hesitancy in domestic stocks. It rebounded on dollar selling to settle at the day's high of 65.70, a rise of 85 paise or 1.28 per cent.

The gains came a day after the battered local currency posted its biggest single-day rise in at least 15 years as the Reserve Bank of India (RBI) allowed state-owned oil refiners, the biggest buyers of dollars, to purchase foreign-exchange through a special forex swap facility.

"The sharp gains in rupee were mostly attributed to RBI intervention and PM's speech," said Abhishek Goenka, CEO of India Forex Advisors. "The rupee was getting support from the strong positive closing in the stock markets."

"The central bank was also seen selling dollars twice in a day via state-run banks, which further helped the rupee," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India). "The trading range for the rupee is expected to be within 65 to 66.50."

Meanwhile, the BSE Sensex climbed 218.68 points or 1.19 per cent, even as foreign institutional investors (FIIs) sold a net Rs 248.18 crore of shares on Thursday.

with inputs from PTI

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