| Date: |
12-01-2011 |
| Subject: |
Rupee Gains as Exporters Convert Earnings |
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The rupee rose the most in more than a month, snapping a two-day drop, on speculation exporters converted earnings into the local currency at a more-favourable exchange rate.
The rupee appreciated 0.6% to 45.165 per dollar at the close of trade on Tuesday. That is the biggest advance since December 7.
The rupee advanced from a three-week low as the Sensex pared losses to 0.1%, the least since the index started declining on January 4, fueling optimism overseas investors are reducing sales of the nation's assets.
"Exporters are selling the dollar on each dip in the local currency," said Vikas Babu, a Mumbai-based currency trader at Andhra Bank . "Equities are showing an improvement, and that means fund flows will remain adequate." The currency, which reached a high of 45.16 earlier, may trade between 44.90 and 45.60 this week, Babu predicted.
Offshore forwards indicate the rupee will trade at 45.88 to the dollar in three months, compared with expectations of 46.23 on Monday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
India's exports increased 26.5% in November from a year earlier, the biggest jump in five months.
Source : economictimes.indiatimes.com
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