The Indian rupee soared to its strongest in a month on Friday as overseas capital flowed in for the fiscal year end and traders speculated the central bank had stepped back to let it rise after inflation hit a 14-month high.
The partially convertible rupee ended 1 percent up at 39.8950/9050 per dollar, not far off the day's peak of 39.85 and its strongest close since February 28. It ended at 40.0950/1050 on Thursday. India's fiscal year ends on March 31, and inflows of overseas capital have picked up of late, some foreign and some from Indians repatriating funds ahead of the deadline.
"We've been seeing a lot of FDI and FII come in before the end of the fiscal year, and that's been happening over the past 2-3 days," said the chief trader with a foreign bank, referring to foreign direct investment and foreign institutional investors. Dealers said the central bank did not intervene to stem the rupee's rise to keep exports competitive.
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