Rupee Climbs On Firm Capital Flow Outlook

Mumbai: The rupee inched towards a nine-year high today, as dealers purchased the local unit on expectations for capitalists flows into the securities market, though worries about the fallout from the U.S. mortgage market restricted advancements.

At 9:45 a.m., the rupee stood at 40.69/70 a dollar, mounting from its previous close of 40.79/80. It beat a nine-year record of 40.20 in July.

A senior dealer with a private bank stated, “There's some speculative interest in the rupee at the moment, but no one really knows whether the flows to support that interest will pan out.”

Capital flows into climbing securities could strengthen the rupee that has attained over 8.5 per cent as compared to the dollar this fiscal to be Asia’s best performing currency.

In the first three days of the current week, foreign funds purchased about $390 million of Indian securities, after being net sellers of around $1.9 billion last month.

Indian shares climbed to a six-week closing high on yesterday when a few Asian and European markets promoted assurance regardless of lingering fears regarding  the health of the U.S. financial system.