Rupee gains most in two weeks; debt auction inflows help

MUMBAI Wed Feb 20, 2013 5:15pm IST

A cashier counts currency notes inside a bank in Lucknow July 16, 2009. REUTERS/Pawan Kumar/Files

A cashier counts currency notes inside a bank in Lucknow July 16, 2009.

Credit: Reuters/Pawan Kumar/Files

Related Topics

MUMBAI (Reuters) - The rupee gained its most in two weeks on Wednesday, largely aided by inflows related to a debt auction, with volumes remaining low as most state-run banks were thinly staffed due to a strike.

Dealers said the gain was due to foreign funds buying rupees to participate in a debt-limit sale for foreigners, which they need to subscribe to for buying local debt.

India will auction about $12.3 billion of limits, including $10 billion of new government and corporate bond limits on Friday.

"Trading volumes were thin, which increases volatility. I did not see much participation by refiners. The next trigger will be the budget," said Naveen Raghuvanshi, associate vice-president at Development Credit Bank in Mumbai.

The rupee has seen a small bounce since it hit a one-month low in Monday's trading. Foreign investors have been jittery ahead of the federal budget on February 28, waiting to see whether Finance Minister P. Chidambaram puts fiscal discipline over election largesse.

Capital inflows have been supportive of the rupee, but the economy's weak fundamentals will continue to weigh.

Trade Minister Anand Sharma said India was likely to miss its $350 billion exports aim for the fiscal year.

Dealers said state-run banks had thin attendance due the strike, which hurt market volumes.

The partially convertible rupee closed at 54.075/085 per dollar versus its previous close of 54.185/195, a second session of gain. It rose 0.2 percent in trade, it biggest daily rise since February 5.

In the offshore non-deliverable forwards, the one-month contract was at 54.38, while the three-month was at 55.00.

In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.18 with a total traded volume of $4.6 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

Markets

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

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