The Indian rupee rose on Monday, boosted by foreign buying of shares as the stock market rose to its sixth record high in as many days, but traders said the gains were checked by suspected central bank intervention. The partially convertible rupee ended at 40.425/44 per dollar, up from Friday's close of 40.46/47, and moving towards a nine-year high of 40.28 hit in late May.
The rupee hit an early peak of 40.38 before its advance was halted by the central bank, which traders said bought dollars via a few state-run banks. "We could see 40.40 as a resistance for the rupee, with gains past this level being blocked by the central bank," a trader at a state-run bank said.
Traders said dollar demand was also seen from a big state-run refiner. Oil is India's biggest import, with the country importing more than two-thirds of its fuel requirements.
The rupee has gained about 9.5 percent against the dollar this year, propelled by surging capital inflows into Asia's third-largest economy. Further, dealers said local companies were raising a huge amount of funds abroad and repatriating the money.
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