The Indian rupee climbed to its highest in more than two weeks on Monday, boosted by foreign capital flows into the local stock market and on exporters paring dollar holdings. The partially convertible rupee ended at 40.27/28 per dollar, its highest since March 6, according to Reuters data. It had closed at 40.43/44 last week.
"We saw a lot of foreign capital inflows hitting the market after the long weekend," said the chief dealer with a private bank." Indian financial markets resumed trading after a four-day weekend. Fund flows into local equities from overseas investors are a driver of the rupee.
Foreigners sold a net $327 million in local shares last week, taking net sales to $3.8 billion so far this year and causing the rupee to lose more than 2 percent against the dollar. In 2007, foreigners bought a record $17.4 billion in stocks, helping the rupee appreciate more than 12 percent against the dollar.
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