Rupee strengthens, but still above 68-mark

Mumbai, Feb 12 (IANS) The Indian rupee halted its downward movement and marginally strengthened on Friday but closed above the 68-mark against the US dollar in the day’s trade — at a level last seen in early September, 2013.

It strengthened by six paise at the close of the day’s trade at 68.23-24 to a US dollar from its previous close of 68.30 to a greenback.

During the intra-day trade, the Indian rupee touched its lowest level since early September 2013 at 68.47 on spot.

“On the back of risk aversion across Asian stock market, dollar gained against the Indian rupee,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.

“However, heavy intervention from RBI (Reserve Bank of India) saved the day. Intervention has helped the rupee to claw back towards 68.22-23 levels on spot.”

According to Banerjee, over the near term the Indian rupee can be expected to trade in a range of 67.50-80 and 68.50-60.

“We can see RBI intervention increase as rupee inches closer to its all time low,” Banerjee added.

The rupee had hit its all time low of 68.85 against a US dollar on August 28, 2013.

The weakness in the rupee value indicated the massive outflow of foreign funds from the Indian equity and debt markets.

The foreign institutional investors (FIIs) were net sellers during the day’s trade. According to data with stock exchanges, FIIs divested Rs.398.37 crore.

On technical levels, rupee opened higher at 68.40 and then made a high of 68.4675 as falling equity markets, weak EMs (emerging markets) currencies weighed on INR.

“However recovery in equity and EM currencies led to long liquidation in USD/INR which helped it to recover during the day,” said Hemal Doshi, chief currency strategist, Geofin Comtrade.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed flat — higher by just 34.29 points, or 0.15 percent at 22,986.12 points.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day’s trade flat. It inched up by five points or 0.07 percent to 6,980.95 points.

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