India’s rupee strengthened to a two- month high, after global funds added to holdings of the nation’s shares to benefit from economic growth. Foreign investors bought $267 million more Indian stocks than they sold on July 4, taking net purchases this year to $1.4 billion, according to exchange data. The currency appreciated 0.8 percent last month. “Inflows into equities recently is a major factor supporting the rupee,” said J. Moses Harding, a Mumbai-based executive vice-president at IndusInd Bank Ltd. “The currency is consolidating at this level.” The rupee rose 0.1 percent to 44.380 per dollar as of 10:37 a.m. in Mumbai, according to data compiled by Bloomberg. The currency reached 44.335 earlier today and on July 4, the strongest level since May 3. India’s $1.3 trillion economy expanded 7.8 percent in the first quarter of 2011 from a year earlier, compared with 8.3 percent in the previous three months, government data showed. Offshore forwards indicate the rupee will trade at 44.87 to the dollar in three months, compared with expectations of 44.91 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars. To contact the reporter responsible for this story: Khalid Qayum in Singapore at kqayum@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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