Rupee rises for the third day to a near 3-week high

Mumbai: The rupee strengthened for the third consecutive day amid this week's surge in Mumbai-listed stocks, while dollar sales by both foreign and state-run banks helped the local currency climb to a near 3-week high Wednesday.

The rupee closed at 95.64 on Wednesday, 21 paise stronger than its previous close of 95.85. Traders said dollar sales by the RBI continued Wednesday, but the scale of interventions appeared to be more moderate than in the previous two trading sessions.

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"The rupee was supported by sustained buying in domestic equities and improving foreign investor sentiment. FII flows have also remained positive over the past few sessions," said Jateen Trivedi, VP and currency research analyst, LKP Securities.

Crude oil prices, which had eased to around $85 per barrel on Tuesday, saw a modest rebound to around $87 per barrel, limiting further gains in the rupee.

The currency is expected to trade in the range of 95.25 to 96 on Thursday. The currency traded in the range of 95.48 to 95.80.

Stronger levels saw dollar buying by defence firms, while weaker levels saw dollar sales by nationalised banks, likely on behalf of the central bank, a trader said.

The rupee has weakened 0.8% so far this fiscal year. Separately, yields of the 10-year benchmark government bond were stable, trading between 6.78% and 6.80%, and closed at 6.79% on Wednesday. It had previously closed at 6.78%. Dealers said that they refrained from taking large positions ahead of Fridays government bond auction.