Rupee rose for a third day on speculation that gains in stocks will encourage FIIs to reduce selling domestic stocks. The rupee climbed to a one-week high as Sensex rose by the most in almost a month.
The currency also advanced after the report from a leading financial daily that India may unveil a Rs750bn economic stimulus plan by the end of this week. RBI will ensure there’s enough cash to support demand, Governor Duvvuri Subbarao was quoted as saying. Growth in Indian economy is slowing and a period of “painful adjustment” is inevitable, he said.
The rupee advanced 0.3% to close at 49.85 per dollar, according to the reports.
Record net sales of equities this year have made the rupee the third-worst performer among the 10 most actively-traded currencies in Asia excluding the yen. Global investors sold US$13.6bn of stocks more than they bought, according to the SEBI data.
Non- deliverable contracts showed an implied rate of Rs50.08 to the dollar, Vs 51.26 at the end of last week.
