Indian rupee snaps 6-day fall, ends 135 paise higher at 63.20, biggest gain in nearly a year
The Indian rupee broke its 6-session losing string and bounced back with vengeance on Friday, jumping 135 paise against the US dollar - its second biggest rise in absolute term in a decade - to close at almost one-week high of 63.20.
Fresh heavy dollar selling by exporters and some banks, along with a rally in local equities boosted the sentiment while firm dollar overseas and sustained capital outflows failed to stem the rupee rise.
At the Interbank Foreign Exchange (Forex) market, the domestic unit opened higher at 64.30 but immediately touched a low of 64.75 on initial weakness in equities.
Later, it rebounded and shot up at the fag-end to settle at 63.20 - which was also the day's high - revealing a rise of 135 paise or 2.09 per cent. Previously, it had flared up by 152 paise, or 3.08 per cent, on May 18, 2009.
Meanwhile, the BSE Sensex spurted by 206.50 points, or 1.13 per cent, on Friday after rising 407.03 points in its previous session, even as FIIs pulled out Rs 1,277.64 crore on Thursday.
The dollar index was up by 0.10 per cent against its major rivals ahead of the Federal Reserve's annual gathering.
Finance Minister P Chidambaram had on Thursday injected some confidence in investors as he said the currency is undervalued and has overshot appropriate levels but that there was no need for "excessive and unwarranted pessimism".
Even the Reserve Bank of India had in a separate statement allayed investors' fears, saying it has adequate foreign exchange reserves to deal with the declining value of rupee and the widening current account deficit (CAD).
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Indian rupee snaps 6-day fall, ends 135 paise higher at 63.20 - Business Today
Rupee may recover to 61/$; CAD to be fully funded: Barclays
NEW DELHI:
India's efforts to curb imports, improve exports and attract greater remittances may help it almost fully fund its Current Account Deficit this fiscal, and also help the rupee recover to 61-level against the US dollar in the next 6-12 months, a Barclays report said today.
According to the global financial services major, the country's Current Account Deficit (CAD), which is the difference between the outflow and inflow of foreign currency, has the potential to "surprise favourably".
Barclays has cut its FY'13-14 deficit forecast to around USD 68 billion (from about USD 80 billion earlier).
"Unless capital flows surprise further to the downside, we think the recent improvements mean India should be able to almost fully fund its current account deficit in FY 2013-14," Barclays said in a research note.
The factors that are narrowing the current account gap include a lower merchandise trade deficit (gold and non-oil, non-gold trade), a steady uptick in services exports and remittance flows, it said.
However, given the present fragile market sentiment, the underlying improvements in India's current account may go unnoticed, it said.
Meanwhile, Finance Minister P Chidambaram on Thursday said the government will make all efforts to contain fiscal deficit at 4.8 per cent and CAD at 3.7 per cent of GDP or USD 70 billion this financial year.
He further said CAD could be even lower than USD 70 billion.
In the fourth quarter of last fiscal, CAD was 3.6 per cent, while for the whole of FY'13 it stood at 4.8 per cent.
On rupee, Barclays said the currency is likely to be around 61 per US dollar in the next 12 months, largely on the back of an improvement in the CAD.
The rupee on Thursday fell for the sixth session in a row and breached the 65 mark to an all-time intra-day low of 65.56.
"We expect the INR at 61/USD in 6-12 months, which partly reflects the current account improvement," it said.
Barclays further said, in the near-term rupee weakness could persist, especially in the absence of policy initiatives to quickly boost capital flows.
"We think recent policy steps have been relatively ineffective at generating near-term flows, and are a drag on the INR," the report added.
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Rupee may recover to 61/$; CAD to be fully funded: Barclays - The Economic Times
as you know BD's politics is not in good shape right now.
. Practically, its impossible. I can say bout doubts of Modi becoming PM but I am sure Congress isnt coming back for a Hattrick.
