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Indian Economy

Rupee spurts 48 paise to close at 1-month high

Nepal rupee

Mumbai | Indian rupee appreciated by 48 paise to close at one-month high of 70.70 against the US dollar on Tuesday, registering its sixth straight session of gain on hopes of weak inflation data for December.

In the six trading sessions, the rupee has gained 110 paise.

At the Interbank Foreign Exchange, the rupee opened stronger at 71.21 a dollar. The local unit moved in a range of 71.21 to 70.69 before finally ending at 70.70, showing a gain of 48 paise over its last close.

This is the highest closing level since January 11 when the rupee had closed at 70.49.

On Monday, the rupee had ended higher by 13 paise to close at 71.18 against the dollar on easing crude oil prices.

According to forex traders, optimism ahead of index of industrial production (IIP) numbers for December and retail inflation for January supported the rupee.

At the end of Tuesday’s trading session in the forex exchange, market was awaiting retail inflation and Industrial output numbers.

According to the official data released after market hours, retail inflation eased further to 2.05 per cent in December from 2.11 per cent in November, raising hopes of further rate cut by the RBI to boost growth.

Industrial production growth, on the other hand, remained subdued at 2.4 per cent in December due to weak performance of mining and manufacturing sectors.

Rising crude prices, foreign fund outflows and heavy selling in domestic equities, however, capped the gains for the domestic market, dealers said.

Brent crude, the global oil benchmark, was trading at USD 62.74 per barrel, higher by 2 per cent.

The BSE Sensex dropped over 200 points, ending in the negative terrain for the fourth straight session Tuesday. The broader Nifty finished at 10,831.40, down 57.40 points, or 0.53 per cent.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.04 per cent to 97.01.

Foreign portfolio investors (FPIs) sold shares worth Rs 466.78 crore, and domestic institutional investors (DIIs) sold shares to the tune of Rs 122.64 crore Tuesday, provisional data showed.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.9353 and for rupee/euro at 80.0259. The reference rate for rupee/British pound was fixed at 91.2620 and for rupee/100 Japanese yen at 64.15.

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