Mumbai, 16 September: The rupee today added another 65 paise to close at a one-month high of 62.83 against the dollar on hopes that Sebi’s steps to ease investment norms for overseas entities in government debt would attract more capital flows.
Bankers and exporters preferred to reduce their dollar positions on expectations that more foreign capital would flow into the equity market.
In the global markets, the dollar was weaker after reports that former US treasury secretary Larry Summers had withdrawn from the race to be the next Federal Reserve chief.
The rupee opened at 63.70 per dollar from 63.48 on Friday at the interbank foreign exchange market. It rose to a high of 62.45 before ending at 62.83 per dollar, a gain of 65 paise or 1.02 per cent. It was the highest level for the rupee since 16 August when it closed at 61.65.
“Stock market regulator Sebi’s decision to do away with the debt auction mechanism for FIIs investment is a welcome step and its reflection is being seen on the rupee,” said Mr Anindya Banerjee, a currency analyst at Kotak Securities. “Global markets are less risk averse now, that is also helping the rupee,” he said.
The rupee’s gains were trimmed after the government said wholesale price inflation for August came in at 6.1 per cent from 5.79 per cent in July, raising concerns that the Reserve Bank would find it difficult to lower interest rates.
New RBI Governor Raghuram Rajan will review the monetary policy on 20 September. pti