Rupee hits a 2-month high as Fed holds rate
17 Mar 2010
The rupee gained on the weakness of the dollar and rose past 45.3450 against the US currency on Wednesday, closing at a two-month high. The rupee ended the day at 45.34/35 against the dollar, off an intraday high of 45.3325, its strongest since 11 January.
The rupee was ruling at around 45.58/59 a dollar when the market closed on Monday. The market was closed on Tuesday for a local holiday.
The rupee's rise was also aided by a speculative rise in share prices underpinned by expectations of capital inflows and the dollar's weakness overseas.
The dollar was hammered by the US Federal Reserve decision to extend the low-interest regime for some time more. The dollar index hit a six-week low after the announcement.
The BSE Sensex rose 0.6 per cent to it's a two-month high, following the Fed announcement.
Overseas investors are reported to have bought $3.2 billion worth of shares in the 12 weeks ended 12 March.
One-month offshore rupee contracts (non-deliverable) were quoted at 45.42/50, at a discount to the domestic spot rate. The most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were quoted at 45.4150 a dollar.