The Indian rupee rose to its strongest level in nearly a week on Monday, powered by strong foreign investment flows, though dollar purchases by oil refiners and central bank intervention limited its gains, dealers said. The partially convertible rupee ended at 40.7725/7825 per dollar, rising from Friday's 40.86/87. The currency hit a nine-year high of 40.28 hit in late May.
"The RBI was intervening today, but not aggressively because they have to be careful not to exacerbate the already loose cash conditions," said a senior dealer with a private bank, referring to the Reserve Bank of India. Overnight interbank loan rates were trading at 3.00/3.25 percent on Monday, an indication of a surfeit of cash in the banking system.
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