Rupee ends flat at 63.69 against $

3 Aug 2017

The rupee took a breather after a spectacular overnight rally and ended little changed at 63.69 - its highest level in 2-years - as RBI intervention in the foreign exchange market mopped up excess dollar liquidity.
Despite a strong start to trade, the home currency relinquished its strong initial gains towards the fag-end trade to end almost flat.
Stamping its best single-day rise this year, it had surged 37 paise to breach the psychological 64-level yesterday.
The local unit touched a fresh 2-year high of 63.56 in early trade following frantic dollar unwinding by exporters and currency speculators as well as short selling.
However, the RBI intervened in the market through state-run banks and capped the steep rise.
Flurry of capital inflows predominantly smart-money into the stock market were a key driver of the rupee's rise at this juncture on "better prospects" of economic growth as compared to other emerging markets aided by steady progress in monsoon and good corporate earnings, a forex dealer commented.
With the latest inflow, total investment in the capital markets (equity and debt) has reached Rs 1.74 lakh crore (USD 26 billion) this year.
The rupee has been on a roll since the beginning of this year, appreciating over 6 per cent against the dollar.
In the meantime, the Reserve Bank yesterday cut the repo rate by 25 basis points to 6 per cent, but pinned future action on more economic data and inflation outlook.
The domestic unit opened higher at 63.67 from Wednesday's closing value of 63.70 at the Interbank Foreign Exchange market and shot-up to hit fresh multi-year high of 63.56 mid-morning trade. (PTI)