Rupee rallies for third day, up 8 p at 53.22 Vs USD

Jan 31 2013, 21:27 IST
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SummaryThe local unit commenced better at 53.26 against the dollar from yesterday's close of 53.30 at the Interbank Foreign Exchange market.

Rising for the third straight session, the rupee today ended at a three-and-a-half-month high of 53.22, up eight paise against the US dollar on sustained foreign fund inflows amid sharp recovery in euro.

Forex dealers said continued dollar demand from oil refiners to meet their month-end requirements and weakness in local equities capped rupee's gains to some extent.

The local unit commenced better at 53.26 against the dollar from yesterday's close of 53.30 at the Interbank Foreign Exchange (Forex) market.

It touched a high of 53.07 and later succumbing to 53.37 on month-end dollar demand from oil importers, before settling at 53.26, a gain of eight paise, or 0.15 per cent. The local unit has flared up by 177 paise, or 3.22 per cent, in January.

"Rupee was seen appreciating for the third straight session against the US dollar. International factors like weak GDP figures from the US and sharp recovery in the euro were contributing towards gains in rupee," said Abhishek Goenka, Founder and CEO, India Forex Advisors.

During Indian Forex market hours, the euro was down 0.1 percent at 1.3550, though not far from yesterday's high of 1.3588, its strongest level since November 2011.

The dollar index, a barometer of six major global rivals, was up by 0.08 pct after an unexpected contraction in the US economy and yesterday's Federal Reserve's subdued economic outlook.

Foreign institutional investors put in over USD 180 million (Rs 958.94 crore) into local equities today, according to BSE provisional data. Meanwhile, the BSE benchmark Sensex fell by 110 points at 19,894.98.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "The rupee extended gains in the first half of session on rising capital inflows but the month end dollar demand and weak tone of domestic equity markets limited such gains.

"The S&P commenting on receding chances of a sovereign investment downgrade on India after the series of policy reforms since September has been positive for the market which witnessed a partial roll back of weakness in rupee".

The premium for the forward dollar ended further lower on sustained receipts by exporters. The benchmark six-month forward dollar premium payable in June settled weak at 152-1/2-154-1/2 paise from Wednesday's close of 155-156-1/2 paise.

Far-forward contracts maturing in December also softened to 316-1/2-318-1/2 from 317-319 paise. The RBI has fixed the reference rate for the US dollar at 53.2890 and for euro at 72.2325.

The rupee edged up further against the pound sterling to 84.03 from last close of

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