Rupee At 3-Week High Boosted By Dollar Inflows.

MUMBAI: The Indian rupee rose to three-week highs on Tuesday, supported by dollar inflows and strong Asian peers, but importer demand for dollars was seen curbing the local unit's rise.

At 9:57 a.m. (0427 GMT), the partially convertible rupee was at 45.3575/3650 per dollar, stronger than Monday's closing of 45.475/4850. In early deals, it rose to 45.35 per dollar -- its highest since Jan. 19.

"There is a positive sentiment from Asian currency strength this morning and sense some inflows as well in the market," said Rohan Naik, head of foreign exchange trading at Standard Chartered Bank in Mumbai.

He also said a further upside to the rupee could be curbed by importer demand for the dollar at current levels and sees the rupee trading in the range of 45.30-45.50 per dollar intra-day.

Most Asian currencies were stronger compared to the dollar on Tuesday.

The dollar index, a measure of the greenback's performance against six major currencies, was down 0.13 percent at 77.930 points.

Foreign institutional investors bought Indian shares worth $49.17 million on Friday. This was the second straight session when foreigners bought shares after being net sellers in the previous five sessions.

They have pulled out $1.3 billion this year until Feb. 4 on concerns over high inflation.

Indian shares rose 0.3 percent in choppy early trade on Tuesday, with financials and outsourcers leading the rise. [.BO]

One-month offshore non-deliverable forward contracts were quoted at 45.51, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX was at 45.50 and the United Stock Exchange was at 45.4975, with the total traded volume at $572 million.

Source : economictimes.indiatimes.com