Rupee gains against dollar ahead of CPI inflation data

NEW DELHI: The rupee appreciated 21 paise to 66.33 against the US dollar in trade on Monday ahead of the domestic consumer price inflation data scheduled later for the day, and the two-day US Federal Reserve policy review starting September 16.

The domestic currency has moved in a wide range of 66.30 to 66.49 in trade on Monday.

The domestic currency had logged fifth week of consecutive fall last week. The local unit had slipped 8 paise during the week to close at 66.54 per dollar after touching a 2-year low of 66.86 on persistent dollar demand from banks and importers.

There are fresh hopes that the the US Fed would further delay the interest rate hikes amid weak outlook for the global economy. Any rate hike by the US Fed, nonetheless, may trigger a knee-jerk reaction in the currency markets, with emerging market currencies, likely to be at the receiving end.

In an interview to ET Now, a spokesperson from Jefferies on Monday said that he expects the US Fed to remain status quo this time and hike rate in December.

Dollar index, which tracks the dollar movement against a basket of six major world currencies, stood at 95.09, down 0.1 per cent.

"The rupee’s fundamentals are vastly improved compared to 2013. Forex reserves are at all-time high and India is likely to run a balance-of-payments surplus this year. We expect a 3-5 per cent annual depreciation of the rupee over the next few years," said Mihir Vora, Director & Chief Investment Officer, Max Life Insurance.