India rupee hits 3-1/2 month highs; oil demand limits gains

Wed Jan 30, 2013 5:13pm IST

Related Topics

* Rupee ends at 53.30/31 per dollar vs 53.76/77 on Tuesday

* Exporters sell dollars on expectations of more supply in near-term

* USD/INR may fall to 52.50 levels in the next one month-trader

By Swati Bhat

MUMBAI, Jan 30 (Reuters) - The Indian rupee strengthened to its highest level in nearly three-and-a-half months on Wednesday, helped by dollar inflows for upcoming share sales and positive sentiment on the back of a strong euro.

The Indian government expects to raise more than $465 million by selling a 10 percent stake in Oil India Ltd on Friday, while an about $2 billion stake sale in power producer NTPC is likely to take place on Feb. 7.

The gains in the rupee came despite caution about whether the Reserve Bank of India will continue to cut interest rates after lowering the repo rate by 25 basis points on Tuesday. These worries have hit domestic bond prices, and capped share gains.

"The flows for the stake sales via qualified institutional placements and offer for sales which are in talks are helping the rupee. Exporters, too, are selling on expectations of more dollar supply," said Vikas Babu Chittiprolu, a senior forex trader at state-run Andhra Bank.

"I expect the rupee to gain towards 52.50 in the next one-month," he added.

The partially convertible rupee closed at 53.30/31 per dollar, 0.9 percent stronger than its close of 53.76/77 on Tuesday. The unit rose as high as 53.28, its strongest since Oct. 18.

Traders said the rupee benefited from a gain in the euro to 14-month highs against the dollar ahead of the Federal Reserve's first policy meeting of the year. The Fed is widely expected to stick to its super-easy policy until U.S. unemployment falls sharply.

Traders said larger gains in the rupee were capped by demand for the greenback from oil firms, the biggest buyers of dollars in the domestic currency market, whose demand peaks at the end of each month when they are required to make payments.

In the offshore non-deliverable forwards, the one-month contract was at 53.53 while the three-month was at 54.10.

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 53.52 with a total traded volume of $5.02 billion. (Editing by Anand Basu)

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
People walk in the Wipro campus in Bangalore June 23, 2009. REUTERS/Punit Paranjpe/Files

Wipro Q4 net profit beats estimates, rises 29 percent

Wipro posted a 29 percent rise in its fourth-quarter net profit, beating expectations, helped by increased IT spending by its customers. For the quarter ended March 31, the company said it earned 22.27 billion rupees compared with 17.29 billion rupees a year earlier.  Full Article | Full Coverage 

REUTERS SHOWCASE

Election 2014

Election 2014

India holds biggest day of voting with BJP gaining strength  Read | Full Coverage 

Market Eye

Market Eye

Sensex jumps 351 points, snaps 3-day losing streak  Full Article 

Insider Trading Case

Insider Trading Case

Ex-Goldman director Rajat Gupta to surrender June 17 in insider case.  Full Article 

Expansion Plans

Expansion Plans

Reliance Industries, HPCL Mittal plan refinery expansions.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Deal Talk

Deal Talk

Piramal to buy 20 percent stake in Shriram Capital for $334 million.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

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