Rupee closes 1 yr higher against USD at 44.11/12

Mumbai, Feb 2: The Rupee closed at twelve months high today of 44.11/12 against the US dollar as compared to the previous day's close of 44.17/18, dealers said.

The Indian rupee hit a one-year high on Friday as a number of developments this week raised expectations of robust foreign inflows, but investors suspected Central bank intervention pulled it off its peak.

The partially convertible Rupee hit a high of 44.05 per dollar in early trade, its strongest since January 31, 2006, before ending at 44.11/12, still up from its previous close of 44.17/18.

Sentiment on the Rupee was boosted after Standard&Poor's lifted India's credit rating to investment grade on Tuesday, and was helped by Wednesday's interest rate rise by the RBI - and the prospect of more to come after data on Friday showed inflation had risen back above 6 per cent in mid-January.

Further, a rise of nearly 1 per cent in the benchmark stock index to a record close on Friday fuelled anticipation amongst traders of a renewed burst of capital flows into Asia's fourth-largest economy.

Foreign fund investments in a surging stockmarket have helped the Rupee appreciate about 6.5 per cent since it hit a three-year low in July.

Still, traders remained cautious about selling the dollar after the Central bank was again suspected of intervening to check the Rupee's gains.

The Central bank intervenes to protect exporters' competitiveness and to curb excess volatility.

Forward premia remained choppy in the trade and ended ten paise lower from its last close. Six-month and Twelve-month premia closed at 3.39 per cent (3.49) and 3.01 per cent (3.07), respectively.

The Reserve Bank of India (RBI) fixed the reference rate at Rs 44.11 per US dollar, up by six paise from its previous day (January 31) rate of Rs 44.17 per US dollar, an RBI spokesperson said here.

However, the performance of the domestic unit against other currencies was mixed. The Rupee was down against the Euro at Rs 57.40/42 (57.18/20) per unit, it was Rs 86.78/80 (86.36/38) per unit against Pound Sterling, and at Rs 36.42/44 (36.37/39) per 100 units against the Japanese Yen, dealers said.

UNI