Mumbai, Oct 6: Despite reported intervention by the Reserve Bank of India (RBI) to cap the rupee surge this week, the Indian unit kept on moving up to a fresh nine and half year peak at 39.49/50 against US dollar due to heavy inflows poured in by the foreign institutional investors.
Making a firm start at 39.75/76 per dollar on the opening day of the week, the partially convetible Indian currency made a gain of almost 25 paise aginst US unit, before closing more firm at 39.49/50 per dollar on Friday.
However, during the week the Central Bank, at its Liquidity Adjustment Facility (LAF) window, sucked-out Rs 1,95,770 crores to drain out the excess liquidity in the market.
As the domestic market remained volatile through out the week and the Sensex moved up to touch an all time high near to 18K, the rupee drew enough strength from the eqity inflows, dealers opined.
According to the dealrs, total inflows were in the range of USD 5-6 million on Friday, while the inflows during the last two weeks were estimated to be around USD 12 billion. The dealers also expected that if the present trend continues in the next week, rupee may appreciate further.
''The continuing inflows indicate further appreciation of the currency in the weeks ahead. If things go in the current levels, Rupee may reach up to 38.55 against US dollar by the end of this year.'', said a senior dealer with a bank.