The Indian rupee posted its best single-day gain in three weeks on Friday, while it rose 4.1 percent on the year, boosted by record foreign fund investments into Asia's third largest economy. The partially convertible rupee closed 2010 at 44.70/71 per dollar, up 0.55 percent from its Thursday close of 44.95/96, making it the rupee's best single-day rise since December 7.
The unit rose to as high as 44.6550 earlier in the day, its highest in three weeks. "Lots of rally in the rupee today mostly due to the lack of participation. I think this would be corrected on Monday," said Naveen Raghuvanshi, an associate vice president and forex trader at Development Credit Bank in Mumbai. Dealers said most of the gains in the rupee were shadowing the local sharemarket gains and the dollar's broad losses versus major currencies.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX closed at 44.9150, with the total traded volume on the two exchanges at $2.8 billion. One-month offshore non-deliverable forward contracts were at 44.89, weaker than the onshore spot rate.
The one-year onshore forward premium closed at 257.25 points, compared with 253 points on Thursday The index of the dollar against six major currencies was down 0.6 percent at 79.039 points when the rupee market closed. The euro edged up to a two-week high against the dollar on Friday on year-end buying by central banks, while the Swiss franc hovered near a record high against the dollar in thin trading conditions.
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