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Wednesday November 25, 11:00 AM
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Rupee at 1-wk high as dollar falls, shares rise
MUMBAI (Reuters) - The rupee rose to one-week highs on Wednesday, supported by a weaker dollar overseas and on expectations the government will not impose strong measures to limit capital inflows.
At 10:20 a.m. (0450 GMT), the partially convertible rupee was at 46.32/33 per dollar, off an early high of 46.2750, its strongest since Nov. 18, and about 0.1 percent stronger than Tuesday's close of 46.37/38.
"As of now, flows have supported the rupee. A weaker dollar keeps sentiment bullish in favour of the rupee," said a trader with a foreign bank.
The dollar fell to a seven-week low versus the yen. The dollar index against six major currencies was down about 0.2 percent.
Expectations of no strong steps from the government to limit capital flows into the country also lifted sentiment.
India can absorb $100 billion of capital inflows, nearly double what is expected this year, before it needs to take strong restrictive measures, C. Rangarajan, chairman of the prime minister's Economic Advisory Council, told the Reuters India Investment Summit on Tuesday.
Higher local stocks also supported demand for the rupee. Foreign portfolio buying of about $15.3 billion this year has helped the rupee recover from a record low of 52.2 in early March.
One-month offshore non-deliverable forward rupee were quoting at 46.29/39, close to the onshore spot rate.
(Reporting by Anurag Joshi)
(For more news on Reuters Money visit http://www.reutersmoney.in)
