The Indian rupee strengthened on Monday as pent-up dollar inflows and higher-than-expected growth in December industrial output raised hopes for stronger economic outlook. The partially convertible rupee closed at 46.32/33 per dollar, 0.4 percent stronger than its 46.50/51 previous close last Thursday. Indian financial markets were shut on Friday for a local holiday.
Most Asian markets are shut on Monday and Tuesday for Lunar New Year holidays, while New York is closed on Monday for the Presidents Day holiday. "We have had net inflows for the day I guess. With New York holiday, there was not any dollar demand as such," said R.K. Gurumurthy, head of treasury, at ING Vysya Bank.
One-month offshore non-deliverable forward contracts were quoted at 46.30/40, little changed from the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX closed at 46.3550 and 46.3525 respectively, with the total traded volume on the two exchanges at a low $3.8 billion.