Rupee rises to 13-month high

MUMBAI: The rupee rose to another 13-month high against the dollar on speculation that higher local growth will help draw funds from foreign funds. The currency has appreciated 3.5% in the past week and 13% from its lifetime low of 52.20, as foreign funds bought a net $12.4 billion of local stocks in the year till date. The rupee rose 30 paisa to 46.36 against the dollar and dealers say the momentum could raise it higher, dealers said.

Alistair Chan, economist at Moody���s Economy, says the market expectations for higher interest rates have seen the rupee trade at its highest level against the dollar in over a year. ���(Deputy governor���s comment ) suggests that the (central) bank will not intervene to prevent the rupee from strengthening further. Indeed, a stronger rupee will lower import prices, especially for fuel,��� a Moody���s Economy report added.

���The central bank is not much concerned with the day-to-day changes in the value of the rupee. On a long-term basis, we are happy the way it is moving,��� KC Chakroborty, deputy governor of RBI, told reporters on the sidelines of seminar on the small and medium enterprises.

Wholesale prices rising for a fourth week, WPI index climbed 0.7% in the week to September 26 from a year earlier, would also compel RBI to raise interest rates sooner rather than later, dealers said.

Elsewhere globally, the dollar has been on slippery ground again on after stronger-than-expected Australian jobs data and lower initial jobless claims in the US boosted sentiment for emerging market assets. Dollar index, a gauge of the greenback���s movement against six global majors, fell 0.6%.

Government bond prices rose on Wednesday on the central bank announcing very bullish underwriting cut-off for primary dealers. As per RBI data, primary delaers agreed to underwrite Friday���s Rs 10,000 crore auction at rates as low as 83 paisa to Rs 2.17 for the securities.

The 10-year benchmark bond ended at 7.20% lower than Wednesday close of 7.25%. RBI auctioned Rs 9,000 crore of treasury bills on Wednesday Rs 9,500 crore of state loans on Thursday and Rs 10,000 crore of long-dated securities on Friday.