New Delhi: After the Sensex, it was the turn of the rupee to rise to dizzying heights. Raising concerns among exporters and IT companies, the rupee on Wednesday touched nearly nine-and-a-half-year peak at 39.63 against the US dollar, soon after opening trade, buoyed by heavy portfolio investments into the record breaking equity markets.
Later, it was quoted slightly better at 39.70/71 a dollar from an overnight close of 39.7350/7450 in late morning deals.
In active trade at the Interbank Foreign Exchange (Forex) market, the local currency opened strong at 39.68/70 a dollar.
Firming local stock markets and weak dollar overseas pushed rupee upwards to near nine-and-a-half-year high at 39.63 a dollar. It breached previous peak of 39.65 registered on April 14, 1998 and is currently moving towards 39.4090 per dollar recorded on April 8, 1998.
However, dollar buying by oil refiners and other importers for their month-end requirements later pulled rupee back to a low of 39.73 before being quoted at 39.70/71 a dollar in late morning trade on Wednesday.
According to forex dealers there was some intervention by the central bank to prevent the sustained surge in the rupee value to protect the exporters' competitiveness.
The dollar fell back to record low against the euro in New York on Tuesday night.
Meanwhile, Foreign Institutional Investors (FIIs) picked up shares nearly worth $2 billion since September 19 and their total investments in equity markets have crossed $11 billion this year so far, surpassing previous record investments of $10.79 billion in the year 2005.
The strong rupee brings good news for imported products like electronics and for people traveling abroad. But the IT sector and exports have been bearing the brunt.
A strong rupee brings with it a lot of advantages, especially, if you are planning a holiday abroad. Travel agents say that a four-day trip to South East Asian countries like Singapore or Malaysia could get cheaper by Rs 5,000 to Rs 7000.
The rising rupee is also good news for the stock markets. If the rupee continues to gain against the dollar, foreign institutional investors or FIIs will find investing in India even more attractive as their dollar returns will rise even with steady rupee returns.
(With inputs from PTI)
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