Mumbai: The Indian rupee rose sharply against the dollar on strong inflows from foreign portfolio investors and as banks sold dollars in anticipation of an increase in inflows because of measures announced by the Reserve Bank of India (RBI) last week. At 2.40pm, the rupee was trading at 64.15 per dollar, up 1.7% from Friday’s close of 65.2450. It had opened higher at 64.4750 and touched a high of 64.09. The forex market was shut on Monday for the festival of Ganesh Chaturthi. “Clearly, there are some inflows in both the debt as well as the equity markets and since there was no trading in Mumbai Monday, there are some bunched up inflows,� said a dealer with a French bank, adding that though Mumbai market was shut on Monday, there were dollar inflows in other markets like Delhi and Chennai. “Those inflows had strengthened the rupee to 64.70 per dollar in the absence of any dollar demand and today (on Tuesday) besides the inflows, the rupee has also taken comfort from news that the US attack on Syria may be delayed,� the dealer with the French bank said. A delay or no military action by the US in Syria could ease oil prices, helping the rupee. A notification by RBI on Friday allowing non-resident Indians (NRI) to buy shares of listed Indian companies under revised foreign direct investment norms also improved sentiment in the market as it will lead to more dollar inflows. “NRIs can invest in Indian companies by inward remittances through normal banking channels or way of debit to the NRE/FCNR account of the person concerned maintained with an authorised dealer/bank,� RBI said on Friday. A slew of measures by RBI recently has led to a sharp rise in the rupee in the last four trading sessions. Since 3 September, when the rupee closed at 67.73 per dollar, it has gained 5.68% to touch an intra-day high of 64.09 per dollar. The rise in the rupee means that it is no longer the worst performing currency in Asia, the Japanese yen having fared worse. Since January, the rupee has weakened 14.2%. The dollar index, which measures the US currency’s strength against major currencies, was trading at 81.89, up 0.12% from the previous close of 81.793. Dollar inflows and a stable rupee has also lifted sentiment in the local stock market. India’s benchmark Sensex gained 626 points, or 3.25%, to 19,896.06. The yield on the 10-year bond was at 8.483%, down 12 basis points from previous close of 8.61% It opened at 8.432% and touched a high and a low of 8.517% and 8.409%, respectively. India’s overnight call money rate was trading at 10.4%, down from Saturday’s close of 35%. It opened at 10.3% and touched a high and a low of 10.4% and 10.25%, respectively.‬‬

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