Rupee hits 7-month high as custodian banks sell dollars

MUMBAI Mon Mar 10, 2014 8:08pm IST

A street side restaurant owner holds a bundle of currency notes as he sits outside his restaurant in New Delhi November 22, 2013. REUTERS/Adnan Abidi/Files

A street side restaurant owner holds a bundle of currency notes as he sits outside his restaurant in New Delhi November 22, 2013.

Credit: Reuters/Adnan Abidi/Files

Related Topics

MUMBAI (Reuters) - The rupee rallied to its highest level in seven months on Monday as foreign investors continued to buy into both equities and debt, even as most other Asian currencies fell after surprisingly weak Chinese trade data.

Strong dollar selling by custodian banks on behalf of foreign investors forced exporters to also step up their greenback sales.

However, momentum could wane in the near-term for the rupee ahead of consumer inflation and industrial output data due on Wednesday. Trade data could also be released this week, although no date has been fixed yet.

"The rupee initially was caught between the U.S. non-farm payrolls data and the Chinese trade numbers but custodian banks started selling aggressively in late trade," said Pramod Patil, head of foreign exchange and fixed income trading at United Overseas Bank.

The partially convertible rupee closed at 60.85/86 per dollar compared with 61.08/09 on Friday. The unit rose as high as 60.79, its strongest since August 12.

The rupee benefited after Indian shares again hit all-time highs on Monday, although both the Sensex and Nifty indexes ended the day with only slight gains.

Foreign investors bought a net 25.77 billion rupees of shares on Friday, their biggest daily purchase since December 9. That marked their 16th consecutive buying session for a net total of about $1.4 billion.

For the year, overseas funds have bought a net $852.10 million in equities and $5.6 billion in debt.

The gains contrasted with falls in most Asian currencies on Monday after Chinese trade data added to worries of a slowdown in the world's second-largest economy.

In days ahead, traders broadly expect the rupee to move in a 60.65 to 61.65 range during the week with oil importers expected to step up dollar purchases at lower rupee levels.

In the offshore non-deliverable forwards, the one-month contract was at 61.23 while the three-month was at 61.89.

(Editing by Anupama Dwivedi)

FILED UNDER:

Reuters Showcase

Land Ordinance

Land Ordinance

Modi says willing to make changes in land decree  Full Article 

Sahara Woes

Sahara Woes

SEBI cancels Sahara's portfolio management licence  Full Article 

Gold Demand

Gold Demand

India gold demand muted, eyes cut in import duty  Full Article 

Coffee's Hot

Coffee's Hot

IPO could value Cafe Coffee Day at $1 billion  Full Article 

Sahara Salaries

Sahara Salaries

Some staff say Sahara has not paid salaries for months   Full Article 

DLF Fined

DLF Fined

DLF says reviewing $8.4 million SEBI penalty  Full Article 

Rail Budget

Rail Budget

Breakingviews - India goes back to future with $137 bln rail push  Full Article | Full Coverage 

Clean Energy

Clean Energy

India says clean energy a $160 billion opportunity over five years  Full Article 

Global Markets

Global Markets

Global investors lift exposure to stocks as major markets touch record highs  Full Article 

Reuters India Mobile

Reuters India Mobile

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