February 20, 2013

Rupee gains most in two weeks; debt auction inflows help

Rupee gains most in two weeks; debt auction inflows help - The Economic Times

The rupee gained its most in two weeks on Wednesday, largely aided by inflows related to a debt auction, with volumes remaining low as most state-run banks were thinly staffed due to a strike.

The rupee has seen a small bounce since it hit a one-month low in Monday's trading. Foreign investors have been jittery ahead of the federal budget on Feb. 28, waiting to see whether Finance Minister Palaniappan Chidambaram puts fiscal discipline over election largess.

Capital inflows have been supportive of the rupee, but the economy's weak fundamentals will continue to weigh.

Trade Minister Anand Sharma said India was likely to miss its $350 billion exports aim for the fiscal year.

Dealers said state-run banks had thin attendance due the strike, which hurt market volumes.

The partially convertible rupee closed at 54.075/085 per dollar versus its previous close of 54.185/195, a second session of gain. It rose 0.2 per cent in trade, it biggest daily rise since Feb 5.

In the offshore non-deliverable forwards, the one-month contract was at 54.38, while the three-month was at 55.00.

In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.18 with a total traded volume of $4.6 billion.

Source : Economic Times

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