Announcements by new RBI Governor Raghuram Rajan led to further strengthening of rupee against dollar rising 77 paise on Friday to close at 65.24, the highest level in almost two weeks.
Dollar sales by exporters, a weak US currency overseas and renewed capital inflows also helped the rupee to gain.
The rupee opened at 66 against the dollar from 66.01 previously at the interbank foreign exchange market and touched a low of 66.32. It bounced back to a high of 65 before settling at 65.24, a rise of 77 paise or 1.17 per cent.
Rajan, who took over as RBI chief on Wednesday, had announced steps to attract dollar inflows, including enhanced limits for exporters to re-book cancelled forward exchange contracts and a window to swap foreign currency deposits.
News from the venue of the G20 Summit in St Petersburg in Russia also appeared to give hope to investors.
The BRICS grouping, including India, on Thursday decided to launch a $100 billion currency reserve fund to help them navigate through an imminent phase out of the US stimulus.
Separately, India and Japan today expanded their currency swap arrangement to $50 billion from $15 billion.
The RBI’s liquidity-tightening measures may be rolled back by October as market sentiment and the rupee are expected to improve, Barclays said. The fresh RBI steps are likely to raise the possibility of better forex inflows in the next three months, it said.
Keywords: Rupee, Dollar, interbank foreign exchange, rupee-dollar trade, forex, opening trade
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