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Rediff.com  » Business » Re crawls back to 52-mark on USD inflows

Re crawls back to 52-mark on USD inflows

Last updated on: October 11, 2012 18:25 IST

RupeeSnapping a four-day losing trend, the rupee on Thursday closed 37 paise higher at 52.68 on the back of capital inflows worth $200 million, amid Finance Minister P Chidambaram playing down any serious threat of a rating downgrade by S&P.

At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced slightly weaker at 53.09 a dollar from overnight close of 53.05.

It touched a low of 53.16 on continued dollar demand from importers and some weakness in stocks in the initial stage.

However, tracking the recovery in stock market after Chidambaram's rating comment in Tokyo, the rupee bounced back from mid-session and touched a high of 52.63.

The rupee concluded at 52.68 -- a rise of 37 paise or 0.69 per cent.

In past four sessions, it had fallen by 131 paise. FIIs on Thursday pumped in Rs 1,043 crore (approx. USD 200 million) in stocks as per provisional BSE data.

"I don't think there is a serious threat of downgrade", Chidambaram said in Tokyo when asked about his reaction to the recent threat of downgrade of India's credit rating in 24 months by S&P if more reforms measures were not implemented.

Forex dealers said weakness in dollar index, a gauge of six global rivals, which was down by 0.33 per cent after a downgrade of Spanish government debt, also helped rupee rise.

"Rupee shrugged of the weakness of previous session on rising capital inflows and active reforms agenda," said Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said.

Earlier today, government today approved road projects worth Rs 1,500 crore (Rs 15 billion) and raised retail prices of urea marginally by Rs 50 per tonne to incentivise the retailers to provide sales receipts of crop nutrients to the Centre.

Bankers said the rupee appeared to have ignored the widening trade gap that rose to a 16-month high of $18 billion in September after exports declined for the fifth month in a row.

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