Rupee moves up during the week at 39.71 against USD

Mumbai, Nov 25: As expected Indian Rupee moved up this week to 39.71 against US Dollar despite bullish and bearish movements in the local equity market during the week.

Amid reasonable volatility in the inter bank foreign exchange (Forex) market, the partially convertible Indian unit traded within the range bound limit between 39.48 and 39.71 per dollar throughout the week, dealers said.

''Exporters were selling-dollar consistently on most of the days in the week, which pushed Rupee to the weaker side against greenback but at the same time the inflows in the equity market fuelled it to recover the loss,'' a senior dealer with a leading private sector bank said.

Moreover, during the week the reported intervention by the Reserve Bank of India (RBI) prevented Rupee's appreciation beyond a certain level around 39.30 per dollar, he added.

The market analysts observed that the Central Bank played an active role in October as well it has continued this month.

According to the data released earlier last week, the central bank through the PSU banks bought a record USD 11.87 billion in September to prevent the Rupee's rise and analysts said it played an active role in October and November as well.

The local equity market witnessed high volatility as foreign investors sold shares worth about USD 300 million so far this month, after buying USD 5.1 billion in October.

Moreover, the dealers opined that for the short term, the Rupee might trade within a range bound limit due to continuous reported intervention by the Central Bank. But, in long run, the local unit is expected to appreciate against the greenback in future sessions as the persisting worries over slowdown in US economy is expected to continue further.

The volatility in the market would continue in future sessions due to persisting worries over credit crunch and conditions of economic recession in US. The prevailing reasons may boost up the inflows in Indian as well as Asian markets. Simultaneously, the movement of the Indian unit may follow the trends in the local equity market. Even though, Indian market witnessed correction in the early week, but global cues gives a way to an idea that Rupee would appreciation further in the coming sessions, dealers added.

UNI