RTTN:Indian Rupee Rises To 4-day High Against US Dollar
The Indian rupee continued to move in the recovery track against the US dollar on Friday morning as domestic equities rallied after the Indian government's plans to introduce various reform measures to encourage foreign capital inflows. Indian shares rose ahead of the wholesale price index-based inflation data for May, which is slated for release later in the day. The benchmark BSE Sensex is currently up 223 points or 1.2 percent at 19,051, snapping a three-day losing streak. The broader Nifty index is at 5,771, up 72 points or 1.27 percent from its previous close.
With the rupee weakening against the dollar and the Centre's current account deficit remaining at a high level, the Indian government is contemplating to introduce various reform measures to encourage foreign capital inflows. These measures include raising foreign direct investment (FDI) caps for some sectors and easier norms for the entry of foreign institutional investors (FIIs) into the country's markets, reports said.
The government is looking at raising the FDI ceiling in Insurance, pension, defense and telecom are some of the sectors. Besides, it is also finding ways to resolve issues concerning coal and gas pricing and arrest a decline in natural gas, fertilizer and crude oil production.
Finance Minister P. Chidambaram said the government would take a call on further FDI reforms soon, while the Securities and Exchange Board of India (SEBI) would decide on easing norms for FIIs. He also met Prime Minister Manmohan Singh to discuss coal and gas pricing reforms.
The rupee rose to 57.6850 against the US dollar, improving from Tuesday's all-time low of 58.9855. The next major upside target for the Indian currency is seen around the 57.3880 area, a key support-turned resistance level. The dollar-rupee pair closed yesterday's deals a tad above 58.0, following a bearish swing low of 58.5525 hit initially on Thursday.
