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Upgrade propels rupee to 5-year high

Our Bureau

MUMBAI, Feb. 2

The rupee ended at a five-year high against the dollar on Wednesday, buoyed by a number of positive events, including the news of Standard & Poor's (S&P) foreign currency upgrade.

At the end of the volatile session, the rupee finished at 43.40/41, up 30 paise from Tuesday's closing of 43.70.

Apart from the news of S&P's foreign currency upgrade, the proposal to raise foreign direct investment in telecom to 74 per cent from 49 per cent currently, stock market gains and FII inflows lifted the rupee to 43.40, a closing high it last posted in 1999.

The greenback will seek direction from an event-filled week, with the Federal Open Market Committee meeting scheduled for Thursday, US payroll numbers expected on Friday, and the G-7 meeting scheduled for Saturday.

The forwards also came down sharply on the cancellation of dollar contracts by exporters. The six-month forward closed on Wednesday at 1.84 per cent as against 2.36 per cent previously. The one-year forward also came off to end at 1.56 per cent (1.70 per cent).

The debt market also ended higher following a ratings upgrade. According to a wholesale debt dealer, the Government securities market moved up three to four basis points on the whole.

The benchmark 10-year 7.38 per cent paper finished at 6.68 per cent, against the previous close of 6.72 per cent.

The call money rate ended at 4.60-4.65 per cent in a liquid market.

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Upgrade propels rupee to 5-year high


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