Rupee breaches 47 level in five and a half months

Mumbai, June 1 (PTI) The Indian rupee breached the 47
level for the first time in five and a half months to end at
46.96/97, stronger by 15 paise against the dollar, on
sustained fund inflows into firm equity markets, apart from
the political stability factor.

The rupee had last closed below 47 on December 18, 2008,
at 46.95/96.

Political stability brightened prospects of increased
capital inflows into Indian equity as the new government
hinted at faster economic reforms.

Extending its gains to the fourth day in a row, the
domestic currency resumed firm at 47.00/02 a dollar against
its last close of 47.11/12 a dollar and later moved in a range
of 46.80 and 47.07 during the day.

Dealers at the Interbank Foreign Exchange (forex) market
said the continued weakness in the dollar against major world
currencies helped the rupee gain further ground in the light
of sustained FII purchases in the equity market.

Foreign institutional investors pumped in more than USD
4.0 billion into equity in May.

The Indian benchmark Sensex jumped by another 215 points
or 1.47 per cent after rising by a whopping 1,036 points in
the last three days.

Rupee sentiment was also aided by the absence of dollar
demand from importers even as global oil prices surged past
USD 67 a barrel in Asian trade today.

Meanwhile, the Reserve Bank of India (RBI) fixed the
reference rate for the dollar at Rs 46.99 and for the euro at
Rs 66.48.

Rupee premiums on the forward dollar ended slightly lower
on fresh receiving by exporters.

The benchmark six-month forward dollar premium payable in
November ended at 70-1/2-72-1/2 paise, down from 72-74 paise
on last Friday, and the far-forwards maturing in May also
finished marginally lower at 119-1/2-120-1/2 paise from
120-122 paise previously.

In cross-currency trade, the Indian rupee continued to
decline against the pound sterling, the euro and the Japanese
yen.

The domestic currency fell further against the pound
sterling to end at Rs 76.84/86 from Friday's level of Rs
76.09/11 and slipped gainst the euro to Rs 66.70/72 from Rs
66.49/51 previously.

It also moved down against the Japanese yen to finish the
day at Rs 49.49/51 per 100 yen from Rs 49.19/21 per 100 yen
previously. PTI RSU
AM
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