Rupee opens one year high against per US dollar

Mumbai, Feb 2: The Rupee today opened one-year high at 44.10/11 against the US dollar compared to its previous day's rate of 44.17/18, dealers said.

The Indian currency rose to a one-year high on Friday, tracking the dollar's weakness against some currencies and on expectations of renewed capital inflows, but the market expects, central bank may intervene to weaken the Indian unit.

The partially convertible Rupee was at 44.10/11, after hitting its highest level since 31 January 2006 in early trade, and up from the previous close of 44.17/18.

Most Asian currencies held steady against the dollar after the US Federal Reserve left interest rates steady at 5.25 per cent on Wednesday and said readings on core inflation had improved modestly in recent months.

India's benchmark index rose to a lifetime high in early trade, with investors expecting flows into the equity market to boost the Rupee.

Foreign fund investments have helped the Rupee appreciate about 6.5 per cent after falling to a three-year low in July.

Sentiment for the Rupee remained high follwing Standard and Poor's raised India's credit rating to investment grade on Tuesday, which is likely to attract more foreign investments into India.

The Rupee was also buoyed after the Reserve Bank of India raised its short term lending rates by 25 basis points to 7.50 per cent on Wednesday to tame inflation and curb credit growth.

Still, investors were cautious of building long positions in the Rupee, after the central bank was suspected of aggressively selling dollars to check the rupee's gains, dealers said.

UNI