TH:Rupee gains as domestic equities surge; touches 49 level against the dollar
The rupee touched 49 against the dollar for the first time since November. At 1.20 p.m., the rupee was trading at 49.97 against the dollar.
The rupee had opened higher at 50.03 on the back of a strong euro and Asian equities. It later on strengthened as the domestic equity markets surged following the 50 basis point cut in the Cash Reserve Ratio, announced by the Reserve Bank of India.
On Monday, the rupee had closed at 50.10/11.
According to Mr Hemal Doshi of Geojit Comtrade, the euro gained to $1.3, a psychologically important mark, which saw an improvement in the global risk sentiment. Expectation that the RBI would cut rates was another reason that the rupee opened stronger.
“The rupee has started appreciating fundamentally because of the dollar inflows into NRE deposits and FII inflows into debt market. From here on the rupee could weaken a bit and could trade in the range of 50-50.5,’’ he said.
Dollar purchases by oil companies could also put pressure on the rupee, said forex dealers.
