Contrary to the weakness in local stocks, the Indian rupee today recovered by 20 paise to close at 50.18/19 against the Greenback on late dollar selling by exporters as Finance Minister Pranab Mukherjee today announced Union Budget for 2012-13.
Sustained capital inflows also helped the rupee rise while better dollar overseas and sluggish domesti equities capped the rupee surge, a dealer said.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed strong at 50.27/28 in line with early rise in stocks but turned negative at midsession and logged a low of 50.43 in line with drop in local equities. However, fag-end dollar selling by exporters and some banks aided the to rupee to bounce back to settle at 50.18/19 as against Thursday’s close of 50.38/39, showing a rise of 0.39 per cent.
Thursday, it was tumbled by 0.47 paise or 0.94 per cent after the apex bank kept the key interest rates unchanged in its mid-quarter monetary policy review.
FIIs pumped in $36.42 million yesterday, taking a total to over $1.4 billion in the current month till March 15 and over $8.6 billion in 2012 so far as per Sebi data.
“The rupee closed grossly strong. The rupee showed a upward correction mainly on account of profit booking in dollar today after swiftly depreciating to 50.48 levels yesterday. However, the depreciation trend remains intact in the rupee targeting 51 levels in the near term.
The local bourses plunged after a disappointing budget today,” Mr. Abhishek Goenka, CEO, India Forex Advisors said. The dollar index, consisting of six ajor currencies, was up by a mere 0.06 per cent while New York crude oil was trading nearly USD 105.5 a barrel in European market on Friday.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said,”The INR made a stronger opening tracking the overnight weakness in the dollar index, which retreated from its high of 80.74 to 80.20 levels.
The Union budget passed away without making much of noise as if has been a non event.
The budget stressed more on the modes and the avenues for capital acquisitions and raising the revenues through increase in Excise duty and the Service Tax so that the fiscal deficit can be brought under acceptable levels.