Rupee hits two-week high; oil, defence buying hurts

MUMBAI Wed Feb 27, 2013 5:35pm IST

A shopkeeper counts currency notes inside his shop in Jammu July 14, 2010. REUTERS/Mukesh Gupta/Files

A shopkeeper counts currency notes inside his shop in Jammu July 14, 2010.

Credit: Reuters/Mukesh Gupta/Files

Related Topics

MUMBAI (Reuters) - The rupee rose on Wednesday, touching an over two-week high at one point, on optimism the government will deliver a fiscally disciplined 2013/14 budget, attracting more foreign flows into the country.

Investors are also hopeful the government will unveil measures to boost investments on Thursday when Finance Minister P. Chidambaram presents the budget for the year starting in April.

The economic survey showed on Wednesday said India was likely to hit a fiscal deficit target of 5.3 GDP this year despite a significant shortfall in revenue, adding there would be further scope for monetary easing if the government continued with its fiscal consolidation plan.

"INR rose as expectations are for an investor friendly budget and not a voter friendly one. But there was oil and defence demand in the late session which pulled rupee off highs," said Uday Bhatt, a foreign exchange dealer with UCO Bank.

"I expect the rupee to hold in a 53.80 to 54.20 range until the budget announcement tomorrow," he added.

Chidambaram is due to start presenting the 2013/14 budget in parliament starting around 11 a.m. on Thursday.

The partially convertible rupee closed at 53.86/87 per dollar compared with its previous close of 54.09/10.

The unit rose as high as 53.63, its strongest since February 11, but retreated a tad on month-end dollar demand from oil companies and defence-related firms.

Traders said a rebound in shares from three-month lows in the previous session also helped, as recent blue chip underperformers rose on value buying.

Globally, risk assets recovered from Tuesday's losses after Federal Reserve Chairman Ben Bernanke defended the U.S. central bank's monetary stimulus, easing worries over a possible early retreat from bond purchases.

In the offshore non-deliverable forwards, the one-month contract was at 54.19 while the three-month was at 54.82.

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 54.1750 with a total traded volume of $6.45 billion.

(Editing by Anand Basu)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Republic Day

Reuters Showcase

Coal Mining

Coal Mining

India to open coal to commercial mining firms soon, minister says  Full Article 

RBI Loan Rules

RBI Loan Rules

RBI relaxes overseas loan recast rules   Full Article 

E-commerce Firms

E-commerce Firms

Amazon, e-commerce rivals fuel commercial property boom in India  Full Article 

Growth Forecasts

Growth Forecasts

Indian economic growth forecasts pegged back, despite rate cuts: Reuters Poll.  Full Article 

Uber is Back

Uber is Back

Uber back in Delhi; govt says must await approval.  Full Article 

Markets at Record

Markets at Record

Sensex rises to record after ECB stimulus programme.  Full Article 

Pharma Sector

Pharma Sector

Ipca Labs hit by FDA ban on plant for standard violations.  Full Article | Related Story 

Forex Reserves

Forex Reserves

India FX reserves at record high as RBI fortifies defences  Full Article 

QE for Euro Zone

QE for Euro Zone

ECB launches 1 trillion euro rescue plan to revive euro economy.  Full Article 

Reuters India Mobile

Reuters India Mobile

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