The Indian rupee closed at its highest level in over a week on Friday as strong foreign inflows hit the market, including some related to Sterlite Industries' $1.75 billion US share sale, dealers said. The rupee ended at 40.70/71 per dollar, climbing from Thursday's 40.83/84, to its strongest finish since June 21.
It has mostly traded in a 40.50-41.25 range since early May. The rupee hit a nine-year high of 40.28 on May 28. "There was some good profit booking that took place as the rupee moved to 40.70, which gave some good resistance," said a dealer with a private bank. Dealers said flows from Sterlite' $1.75 billion American depository shares issue had started to hit the market, and that other foreign investment flows bolstered the rupee as well.
Sentiment was also boosted after fellow high-yielding Asian currencies such as the Indonesian rupiah and the Philippine peso rose as global risk aversion for emerging market assets eased. Dealers said the demand for dollars in the overseas rupee market had ebbed, suggesting that foreigners were regaining their appetite for the local unit.
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