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Indian rupee ends at one-month high of 62.83 against US dollar

Bankers and exporters preferred to reduce their dollar positions on expectations more foreign capital would flow into the equity market.

BT Online Bureau   Mumbai     Last Updated: September 16, 2013  | 19:09 IST
Rupee ends at one-month high of 62.83 against dollar
PHOTO: Associated Press

The Indian rupee added 65 paise to close at a one-month high of 62.83 against the US dollar on Monday on hopes that the market regulator's steps to ease investment norms for overseas entities would attract more capital flows.

"Market regulator Sebi's decision to do away with the debt auction mechanism for FIIs investment is a welcome step and its reflection we have seen on the rupee," said Anindya Banerjee, a currency analyst at Kotak Securities. "Global markets are less risk averse now, that is also helping the rupee."

The rupee opened at 63.70 per dollar from 63.48 on Friday at the Interbank Foreign Exchange Market. It recovered to 62.45 before ending at 62.83 per dollar, a gain of 65 paise or 1.02 per cent. It was the highest level for the rupee since closing at 61.65 on August 16.

Bankers and exporters preferred to reduce their dollar positions on expectations more foreign capital would flow into the equity market.

In the global markets, the dollar was weaker after reports that former US Treasury Secretary Larry Summers had withdrawn from the race to be the next Federal Reserve chief.

The rupee's gains were trimmed after the government said wholesale price inflation for August came in at 6.1 per cent from 5.79 per cent in July, raising concerns the central bank would find it difficult to lower interest rates.

RBI Governor Raghuram Rajan will review the monetary policy on September 20 amid expectations the rupee's recovery from an all-time low of 68.85 on August 28 would help to unwind some liquidity-tightening measures introduced by the central bank to curb exchange rate volatility.

The government is seeking to revive economic growth and curb the fiscal and current account deficits.

In London, Brent crude fell as much as $2.97 to $108.73 a barrel after a deal to avert a military strike on Syria.

The 30-share BSE Sensex index ended 9.71 points higher at 19,742.47.

With inputs from PTI

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