rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Rupee snaps 4 days of losses on strong foreign fund flows

Rupee snaps 4 days of losses on strong foreign fund flows

Last updated on: December 20, 2013 17:37 IST

Rupee graphThe Indian rupee rose on Friday, mirroring strong stock market gains, ending a week in which it rose 0.1 per cent, despite the Federal Reserve beginning its much awaited stimulus tapering.

The currency's relatively stable performance even as the US announced tapering showed India's better preparedness to deal with any fallout of such foreign fund outflows.

For one, the Reserve Bank of India's two special concessional swap facilities have added $34 billion to forex reserves.

At the same time, the government has said it would contain the current account deficit below $60 billion in the current financial year.

In fact, the rupee was supported on Friday by expectations of more foreign fund inflows as local stocks jumped 1.8 per cent, their most in nearly a month.

Fund flows have been strong in December, both into equities and debt, totalling over $3 billion through Thursday.

"The rupee has gained after opening lower on account of capital flows and Sensex rising as the effect of tapering fade out and risk on sentiment dominates the market," said Anil Kumar Bhansali, vice president at Mecklai Financial.

The partially convertible rupee closed at 62.04/05 per dollar compared with Thursday's close of 62.14/15, snapping three days of losses.

In the offshore non-deliverable forwards, the one-month contract was at 62.55, while the three-month was at 63.37.

Subhadip Sircar in Mumbai
Source:
© Copyright 2013 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.