Persistent dollar selling by banks and exporters helped the rupee
Extending its gains for the fifth straight session, the rupee, on Monday, surged by 28 paise to close at nearly 2-month high at 66.74 a dollar on persistent dollar selling by banks and exporters on hopes of foreign capital inflows into equity market.
The rupee opened higher at 66.80 a dollar from last closing level of 67.02 per dollar at the Interbank Foreign Exchange (Forex) market. It firmed up further to 66.69 per dollar before finishing at nearly 2-month high at 66.74 per dollar, showing a gain of 28 paise or 0.42 per cent.
The domestic currency has gained 61 paise or 0.91 per cent since Junly 26. The domestic currency had last settled at 66.71 a dollar on June 9, 2016.
Overseas investors infused over Rs 12,600 crore into equity markets last month. The foreign capital inflows are expected to grow further with the passage of long-pending GST bill in the Rajya Sabha. The bill has been listed in Rajya Sabha for consideration and passage on Wednesday.
Meanwhile, the RBI fixed the reference rate for the dollar at 66.7412 and for euro at 74.5165.
In cross-currency trades, the rupee recovered against the pound sterling to close at 87.96 from 88.31 on last Friday while dropped further against the euro to settle at 74.50 from 74.47 previously.
The domestic currency also moved down further against the Japanese yen to 65.27 per 100 yen from 64.89.
The dollar index was trading up by 0.16 per cent against a basket of six currencies in the late afternoon trade.
Overseas, the dollar struggled against the Japanese yen but rose against the British pound in late afternoon trade as the UK manufacturing activity hit its lowest level in three years.
In the forward market, premium for dollar ended narrowly mixed due to uneven transactions of dollars.
The benchmark six-month premium for January 2017 moved down to 198-200 paise from 198.5-200 on last Friday while and forward July 2017 contract inched up to 399-401 paise from 397.5-399.
Meanwhile, the benchmark BSE sensex dropped by 48.74 points or 0.17 per cent to close at 28,003.12.
Photograph: Reuters
