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

MUMBAI Wed Jan 30, 2013 5:14pm IST

1 of 2. An employee counts rupee notes at a cash counter inside a bank in Kolkata June 18, 2012.

Credit: Reuters/Rupak De Chowdhuri/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - The 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 government expects to raise more than $465 million by selling a 10 percent stake in Oil India Ltd (OILI.NS) on Friday, while an about $2 billion stake sale in power producer NTPC (NTPC.NS) is likely to take place on February 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 October 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

Public Health

REUTERS SHOWCASE

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Market at Record

Market at Record

Sensex, Nifty hit record highs; reforms outpace hawkish Fed.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Samsung Results

Samsung Results

Smartphone woes drag Samsung Elec Q3 profit to more than 3-year low.  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

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