The Indian rupee rose to a three-week high on Tuesday, extending gains for a third consecutive session on the back of a more favourable global risk environment and large dollar sales by domestic companies. Traders also cited cautious optimism after newly-appointed Finance Minister P. Chidambaram signalled on Monday his intent to push pro-investor policies and undertake fiscal reforms, though most said they would wait for actual action.
"The rupee would need very concrete measures to appreciate beyond 54-53.50 to the dollar. Investors will not buy in unless they see concrete action," said Naveen Mathur, associate director, currencies & commodities, Angel Broking. "The high probability is for the rupee to trade in range with a depreciation bias." The partially convertible rupee closed at 55.0650/0750 per dollar as per the SBI closing rate versus its previous close of 55.52/53.
The one-month offshore non-deliverable forward contracts were at 55.33, while the three-month was at 55.97. In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 55.26 with the total traded volume at around $4.2 billion.
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