Rupee appreciated against US dollar

MUMBAI: The rupee appreciated against the US dollar on Tuesday as foreign investors extended a buying spree of local equities.

The currency gained 0.51% or 29 paisa to close at 60.48 to a dollar, its highest level since August 1, 2013.

Foreign institutional investors ( FIIs) made a net investment of Rs 1,609 crore on Tuesday, according to the Securities and Exchange Board of India data. On Monday, they had bought Rs 4,280 crore worth of equities. They have been lapping up Indian equities for the last two weeks.

“The gains were mainly attributed to the consistent flows in the Indian equity and debt markets by the FIIs,” said Niki Mistry, research analyst at India Forex Advisors. “The local stock market seems to be doing well and the currency has also been stable for the last few months, which have helped in attracting more inflows.”

Exporters, which may have received payments from offshore clients, were seen selling dollars. This, too, pushed the rupee up against the dollar.

The rupee rose to 60.4275 a dollar during the day, but pared some of the gains towards the close of session.

The Reserve Bank of India was seen intervening in the market to stem the rupee’s rise, which may hurt exporters after a certain point.

“Instead, some state-owned banks and oil companies were buying dollars in good quantity at 60.45,” said a currency dealer from a bank.