Rupee Strengthens To Three-Week High Against US Dollar On FX Inflows
The local currency strengthened 17 paise to close at Rs 83.33 against the greenback, the highest level since April 26. It closed at Rs 83.50 a dollar on Thursday.
The rupee strengthened to a three-week high against the US dollar on Friday as banks persistently sold the greenback, likely on behalf of foreign funds.
The local currency strengthened 17 paise to close at Rs 83.33 against the greenback, the highest level since April 26. It closed at Rs 83.50 a dollar on Thursday, according to Bloomberg data.
Banks might have sold the US currency on account of Shriram Finance Ltd. selling stakes in Shriram Housing Finance Ltd. to Warburg Pincus for Rs 4,630 crore via Mango Crest Invest Ltd., forex traders said.
"Today, there were dollar inflows because of Shriram Finance's stake sale to Warburg Pincus. In addition, there were inflows in the debt market. Further, daily FII outflows, which are usually $300–400 million, were just $5–6 million today. Because these outflows were smaller and the RBI was absent, the rupee appreciated," said Vivek Shah, a dealer from LCR Raheja Forex Pvt.
"In the next 15 days, the rupee is likely to stay between Rs 83.20 and 83.60. A breach of Rs 83.20, it can go up higher," Shah said.
"USD-INR fell to Rs 83.34 as inflows for an NBFC and front-running for month-end MSCI flows brought the dollar down after constant selling by RBI at Rs 83.50, and FPI and oil companies stopped buying dollars. Monday is also a holiday for forex, which would have allowed rupee to gain for next week inflows," said Anil Kumar Bhansali, head-treasury, executive director at Finrex Treasury Advisors LLP.
The rupee had opened flat against the US dollar at Rs 83.49 on Friday amid a slight rise in crude oil prices and a strong dollar index, according to Bloomberg data.
