At 11:05am the partially convertible rupee had risen to Rs46.11/12 per dollar, up 0.3% from Rs46.24/25 at Tuesday’s close
Mumbai: The Indian rupee rose for a third straight session on Wednesday, rising to a seven-week high, helped by a report calling for a yuan revaluation and tracking early gains in the domestic shares.
Most Asian currencies got a lift after a researcher with the Chinese Academy of Social Sciences (CASS), the top government think tank, said China should increase the yuan’s exchange rate by 10% in a one-off revaluation.
“Stock markets have played a major role in the last two days. The trend is likely to continue. The report of yuan revaluation also is likely to help rupee to strengthen,” said V.Kumar, chief dealer with State Bank of Travancore.
At 11:05am the partially convertible rupee had risen to Rs46.11/12 per dollar, up 0.3% from Rs46.24/25 at Tuesday’s close. In early trade, the rupee rose as high as Rs46.04, its strongest since 16 November.
The onshore one-year dollar premium edged down for the third straight session to 119 points from around 131 points at the end of last year.
“Premiums have come down due to likely covering by exporters,” Kumar added.
Dealers said they would closely monitor the share market for directions on capital flows.
Indian shares climbed as much as 0.6% in early trade, rising to their highest level since February 2008, mirroring a rise in Asia and on hopes of higher corporate earnings for the December quarter.
However, some profit-taking kept the market choppy thereafter.
In 2009, foreign portfolio buying of more than $17 billion of domestic stocks helped the rupee rise 12.2% from a record low of Rs52.2 hit in early March. The rupee gained 4.7% last year.
The dollar edged up against the yen on Wednesday in choppy trade, recovering from the previous day’s sharp fall when traders locked in gains on its rally over the past month ahead of US jobs data later this week.
One-month offshore non-deliverable forward contracts were quoted at Rs46.09/19, little changed from the onshore spot rate.
In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were quoting at 46.1750 and 46.1725 respectively, with the total traded volume on the two exchanges at about $1.3 billion.
