Rupee extends gain for second day

Extending gains for the second day in a row, the Indian rupee on Friday appreciated by another 27 paise to close at 55.38 against the greenback on sustained dollar selling by exporters on fears intrusion by the central bank amid stable local stocks.  Weak dollar overseas amid sustained capital outflows also helped the rupee rally, a forex dealer said. At the Interbank Foreign Exchange (Forex) market, the domestic unit opened lower at 56.00 as against previous close of 55.65 on dollar buying by importers, mainly oil refiners, to meet their month-end requirements. However, dollar selling by exporters on hopes of further fall in dollar value overseas after data showed stabilising consumer confidence data in Germany, the euro zone’s biggest economy. The dollar indeed, a gauge of six major currencies, was down by nearly 0.23 per cent in European market on Friday. The rupee, later moved in a range of 56.08 and 55.24 before concluding at 55.38, showing a rise of 0.49 per cent. The Reserve Bank’s intervention and its indication on Thursday that it may sell dollars directly to oil companies have aided the rupee rise. Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said,”INR started on a weak note only for short while, tracking advances in dollar index which rose it its highest levels since sep 2010. The pair then started gaining strengthening improved risk appetite in global markets over better than expected German consumer confidence numbers and short covering in equity markets”.  “A partial rollback of petrol prices has been making rounds in the market and if that happen then shall leave a negative impact on market and effect the credibility of the government policies,” he added. The RBI was suspected to intervene in the morning session, the exporter were also seen selling as the market appreciate below 55.50 levels. The RBI bought the bonds of worth Rs.150 billion ($ 2.71 billion) on Friday through OMO, to address the liquidity condition in the local market. Issues like, slowing economy growth, up-side risk of inflation, the fiscal deficit, FII’s being net seller from past few month, political instability, weakening currency are all considered to review the countryís performance.  And coincidently all these factors are running against the nation, making these International Houses to raise the question about the nationís growth,” he added. The rupee premium for the forward dollar ended weak on fresh receivings by exporters. The benchmark six-month forward dollar premium payable in October moved down further to 149-151 paise from 153-155 paise on Thursday and far-forward contracts maturing in April also closed remarkably lower at 277-279 paise from 286-288 paise. By / Gulf Toady