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:

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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