MUMBAI: The rupee rose to an over three-month high on Tuesday, regaining 73 levels. By close of trade, it had gained 13 paise to end at 73. 91 against the US dollar. The last time the rupee had closed around this level was at 73. 84 on September 27 last year.
The domestic currency inflows in the capital markets. “Rupee has risen above 74 with an opening around 73. 95 and flows continue to take it higher as importers are absent from the market, as is the RBI. The US Fed may be in for rate hike, but that has overall not affected the dollar-rupee exchange rate,” said Finrex Treasury Advisors head (treasury) Anil Kumar Bhansali.
Even as the dollar is expected to gain strength globally following anticipated rate hikes by the US Fed, the outlook for the rupee is positive. This is partly because of the strong reserve position. India’s forex reserves stood at $633. 6 billion in the week ended December 31 — a $1. 4-billion decline from the preceding week.
According to a report by Barclays, the RBI is seen to be moving towards a policy of capital account convertibility. “The key objective behind this push towards further liberalisation of the capital account remains to fund India’s investment savings gap,” Barclays said.
