MUMBAI: The Indian rupee strengthened on Thursday, bolstered by a sharp revival in foreign equity inflows and tailing firmer Asian currencies.
Foreign funds have pumped in $2.2 billion over nine sessions to Tuesday, latest data from the Securities and Exchange Board of India showed, as global appetite for risky assets perked up.
At 10:55 a.m. (0525 GMT), the partially convertible rupee was at 44.4200/4225 per dollar, stronger than 44.4750/4850 at close on Wednesday.
"The rupee is supported by strong foreign fund flows to equity," said a senior trader at a foreign bank.
The main stock index, which has been a laggard this year, had climbed 2.9 percent last week following the revival in foreign fund buying. The benchmark was trading up 0.5 percent on Thursday.
A senior trader at state-run bank forecast a range of 44.35-48 for the day, saying 44.35 was a crucial level. "If that breaks, it could rise to 44.28 percent," he said.
Most Asian currencies were stronger. See for a snapshot.
The index of the dollar against six major currencies was down 0.12 percent at 75.029 points.
The one-month onshore forward premium was at 24 points from 24.25 at close on Wednesday, the three-month was at 72.25 points from 75.75 and the one-year was at 244 points compared with 249.
One-month offshore non-deliverable forward contracts were quoted at 44.51, weaker than the onshore spot rate.
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 were all at 44.5525. The total volume was at $2.64 billion.
Copyright Reuters, 2011
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