The Indian rupee headed back towards a near decade high on Tuesday, with investors ratchet up purchases of the local unit anticipating a burst of capital inflows if the US Federal Reserve cuts rates as expected. The partially convertible rupee ended at 39.35/36, per dollar, its highest close in three weeks, and strengthening from the previous close of 39.40/41.
It hit 39.16 last month it's highest since March 1998. "The rupee would have gone higher had it not been for the RBI," said a dealer with a corporate, referring to the Reserve Bank of India, which was widely suspected of having intervened against the local unit through the session to temper its rise.
Sentiment on the rupee was bolstered after India's benchmark share index surged to a new life high buoyed by investors' expectations of a US rate cut. Still, the rupee's rise was limited by suspected central bank intervention, which capped the local unit's gains at 39.35. The Reserve Bank of India bought $52 billion in intervention in the first nine months of the year and is widely seen as having played an active role in the rupee market in October and November too.
Comments
Comments are closed.