MUMBAI: The rupee strengthened for a second straight day on Monday, helped by dollar inflows from an offshore bond sale, while gains in the euro and domestic shares also aided sentiment for the local unit.
Indian Railway Finance Corp (IRFC) raised $500 million via offshore bonds, with the issue attracting a strong order book of over $3 billion, according to International Financing Review, a Thomson Reuters publication.
The rupee has also been bolstered by inflows into equities and debt this month, despite concerns about the withdrawal of the U.S. Federal Reserve's monetary stimulus and China's economy.
Overseas investors have bought a net $430 million worth of stocks over the last eight sessions while pumping in $1.8 billion into debt in February.
"We saw some flows from IRFC, which pushed the rupee higher. It should continue to trade in a narrow range this week with 61.70 to 62.80 holding," said Uday Bhatt, a foreign exchange dealer with UCO Bank.
The partially convertible rupee closed at 62.07/08 per dollar compared with 62.12/13 on Friday.
Broader risk sentiment helped after the euro rose against the dollar on a better-than-forecast German business indicator.
Meanwhile, Indian shares rose for a second consecutive session to a one-month high as blue chips, including banks gained on continued optimism around foreign-investor buying.
In the offshore non-deliverable forwards, the one-month contract was at 62.39, while the three-month was at 63.21.
