Rupee snaps two-day fall as exporters, corporates sell dollars

Mumbai Mon Aug 4, 2014 7:28pm IST

Cycle rickshaws move past a display of rupees at a roadside currency exchange stall in the old quarters of Delhi June 10, 2013. REUTERS/Anindito Mukherjee/Files

Cycle rickshaws move past a display of rupees at a roadside currency exchange stall in the old quarters of Delhi June 10, 2013.

Credit: Reuters/Anindito Mukherjee/Files

Related Topics

Mumbai (Reuters) - The rupee snapped a two-session falling streak on Monday aided by good dollar selling by corporates,including exporters, while gains in the domestic share market also underpinned sentiment.

Traders expect the rupee to remain in the range of 60.50-61.50 to a dollar in the near-term with all eyes set on the central bank's monetary policy review on Tuesday for near-term direction.

The Reserve Bank of India is likely to leave its key interest rate unchanged on August 5 and won't ease policy until early next year on fears food inflation will spike if monsoon rains are below average, according to a Reuters poll.

"Positive Asian currencies and gains in the equity market helped, but oil companies dragged the rupee off highs. Policy is likely to be a non-event unless something drastic like a rate cut is announced, which will then be positive for bond, rupee and stocks," said Vikas Babu Chittiprolu, a foreign exchange dealer with state-run Andhra Bank.

"The central bank will continue to kill volatility and not target any level on the currency as such. 61.20 is a key trigger point, which if broken can push the rupee down to 61.90," he added.

The partially convertible rupee closed at 60.93/94 per dollar compared to 61.18/19 on Friday. The rupee moved in a wide range of 60.8750 to 61.1650 during the day. The unit gained 0.4 percent on Monday, its biggest single-day gain since July 11.

Emerging Asian currencies rebounded on Monday after a batch of U.S. economic reports prompted markets to scale back expectations for the beginning of the Federal Reserve's rate-hike cycle.

Traders will also continue to monitor local shares or clues on the direction of foreign fund flows.

The Sensex ended higher on Monday after two days of losses as software services exporters such as Infosys rallied on a weaker rupee while lenders gained a day before the central bank's policy review.

Total foreign fund inflows into India so far in 2014 have reached $26.16 billion across debt and equities.

In the offshore non-deliverable forwards PNDF, the one-month contract was at 61.32 while the three-month contract was at 61.92.

(Reporting by Swati Bhat)

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

RK Laxman Dead

RK Laxman Dead

'Common Man' cartoonist RK Laxman dead at 93  Full Article 

Banking Revolution

Banking Revolution

India turns to corner shops, mobile phones for banking revolution.  Full Article 

Nuclear Group

Nuclear Group

China urges India to take steps to satisfy standards of NSG  Full Article 

U.S. Blizzard

U.S. Blizzard

Northeast U.S. braves 'crippling' blizzard, transit systems shut.  Full Article 

No Layoffs

No Layoffs

IBM dismisses Forbes report of massive layoffs.  Full Article 

Padma Bhushan

Padma Bhushan

India honours Bill Gates with civilian award  Full Article 

Fashionable Modi

Fashionable Modi

When Modi met Obama, his name was all over - his suit  Full Article 

Spielberg Speaks

Spielberg Speaks

Spielberg: 70 years after Holocaust Jews still face anti-Semitism.  Full Article 

Photo

Australian Open

Sharapova schools Bouchard to advance in Melbourne   Full Article 

Reuters India Mobile

Reuters India Mobile

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