Indian rupee up amid hopes for parliament nod to FDI in retail

Tue Dec 4, 2012 5:11pm IST

Related Topics

* Rupee ends at 54.68/69 per dlr vs 54.77/78 on Monday

* Corp dollar demand in early trade had pushed rupee towards 55

* Parliament nod to FDI in multi-brand retail can push INR to 54

By Swati Bhat

MUMBAI, Dec 4 (Reuters) - The Indian rupee strengthened for a fourth session in five on Tuesday as investor hopes for a parliamentary approval to foreign direct investment in multi-brand retail grew a day ahead of the impending vote.

The parliament began debate on FDI in multi-brand retail earlier in the day with both houses due to vote on the reform on Wednesday.

"If FDI in retail goes through, we may see 54 levels on the rupee or else we are likely to head below 55," said Uday Bhatt, a foreign exchange dealer with UCO Bank.

"If there is an increase in foreign institutional investment limit in government bonds as speculated, we will see a further upside," he added, predicting a 54.50 to 54.95 range for the rupee until the vote on Wednesday.

The government is considering a proposal to raise the ceiling on foreign investments in government and corporate bonds by $5 billion each, a senior finance ministry official said, as the country looks to increase vital capital flows.

The partially convertible rupee closed at 54.68/69 per dollar versus its previous close of 54.77/78.

Traders said heavy dollar demand from a technology firm in early trade had hurt the rupee, pushing it to the day's low of 54.96, but a decline in demand later in the session and improvement in domestic shares helped the rupee recover.

Some traders said the firm was Mphasis, an Indian IT services and back-office support provider and a unit of Hewlett-Packard Co, which had agreed to buy U.S.-based Digital Risk LLC, a mortgage management specialist, for $175 million on Monday.

Some dollar demand from oil firms, the largest buyers of the greenback in the domestic currency market, also hurt the rupee.

Indian shares edged higher, rising for the fifth day in the last six sessions, led by gains in Reliance Industries, on hopes the government will soon approve the company's investment plans for the KG-D6 block.

Foreign funds have bought more than $20 billion worth of domestic shares so far this year and bought debt worth more than $6 billion.

In the offshore non-deliverable forwards, the one-month contract was at 54.97, while the three-month contract was at 55.49.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around $54.8975 with a total traded volume of $5.20 billion. (Editing by Prateek Chatterjee)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Record Highs

Record Highs

BSE Sensex, Nifty hit record highs, insurers gain  Full Article 

Global Growth

Global Growth

IMF cuts outlook, warns of stagnation risk in rich nations  Full Article 

Monsoon Revives

Monsoon Revives

Monsoon revival keeps rain above average   Full Article 

Wipro Results

Wipro Results

Firm sees strong sales growth, eyes Europe deals   Full Article 

Scourge of Inflation

Scourge of Inflation

Markets' post-election enthusiasm lost on consumers  Full Article 

Just Not Enough

Just Not Enough

Amazon's smartphone fails to kindle a "Fire" among reviewers.  Full Article 

Rising Market Value

Rising Market Value

Facebook goes express to mega-cap status  Full Article 

Mining Roadblock

Mining Roadblock

Coal India's plans for 20 mines hit by land, environment delays  Full Article 

Power Jolt

Power Jolt

UAE's TAQA pulls out of India power plant deal with Jaiprakash  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage