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Friday July 3, 08:10 PM
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Rupee up as shares rebound ahead of budget
By V. Ramakrishnan
MUMBAI (Reuters) - The rupee recouped early losses and rose on Friday, helped by gains in local shares ahead of the budget but the dollar's strength against major currencies curbed a further increase.
The partially convertible rupee ended at 47.89/91 per dollar, compared with 47.95/96 at close on Thursday when it had strengthened during trade to 47.74, its highest since June 16. It rose 0.4 percent on the week.
"All eyes are on the budget now and the gains in shares also gave a fillip to the rupee although the dollar is showing some strength," a dealer with a foreign bank said.
The updated budget for 2009/10 will be unveiled on Monday and dealers said reform measures could attract more capital into the country.
The rupee had slid as far as 48.19 in intraday trade as shares initially fell more than 1 percent, but rebounded as the main stock index recovered to end up 1.7 percent.
Net foreign portfolio inflows of around $7.5 billion since mid-March have helped the rupee bounce back from a record low of 52.2 hit in early March.
The stock index had leapt 49.3 percent in April-June, its biggest quarterly gain in 17 years, in anticipation of an economic rebound.
The dollar index, a gauge of the U.S. unit's performance versus majors, was up about 0.14 percent at 1148 GMT.
The government said in a report the economy could grow 7 percent this year and more in coming years if it made sweeping reforms including removal of fuel subsidies, and speeds infrastructure development.
(For more news on Reuters Money click http://in.reuters.com/money)
