Rupee strikes two month high; persistent capital inflows support

06 Jul 2011 Evaluate

Rupee, after taking a breather in the previous session, is back on track on Wednesday. The domestic currency has yet again stroke a two month high after global funds added to holdings of the nation’s shares to benefit from economic growth. Local currency ignoring the choppy domestic share market has gained strength on fresh selling of dollars by banks and exporters in view of persistent capital inflows by foreign funds into the equity markets. Meanwhile, the euro stayed on the back foot in Asia, after having suffered a steep fall against the Swiss franc and the dollar after Moody's slashed Portugal's credit rating to junk status, which increased the demand for safe heaven instruments.

The partially convertible currency is currently trading at 44.38/39, stronger by 11 paise from its previous close of 44.49 on Tuesday. It has touched a high and low 44.44 and 44.33 respectively. The Reserve Bank of India's reference rate for the Dollar stood at 44.4988 and for Euro it stood at 64.3968 on July 05, 2011. While, the RBI's reference rate for the Yen stood at 54.90 and the reference rate for the Great Britain Pound (GBP) stood at 71.2470. The reference rates are based on 12 noon rates of a few select banks in Mumbai.