Rupee maintains 8-yr high at 42.90

By Staff
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Google Oneindia News

Mumbai, Apr 9: The Rupee maintained an eight-year high at 42.90/93 in today's opening session as on its previous day's close on April 5, as prospect of capital inflows spurred investors to buy the currency, dealers said.

The market resumed after the last three day holidays including Good Friday.

It recorded a high at Rs 42.75 and a low at 42.93 during intra-day trade. The current rate is maintained an eight year high at 42.90/91, traders pointed out.

A leading dealer informed that they remained wary of intervention by the Reserve Bank of India.

The central bank is suspected of having sold Rupees regularly since November in a bid to rein in the local unit, which has risen about 10 per cent since last July, when it hit a 3-year low.

The Rupee's gains have been powered by robust capital inflows into Asia's fourth largest economy, and the central bank is thought to be uncomfortable with the pace of its appreciation.

The Rupee is seemed to be overvalued by 10.6 per cent, compared with 7.9 per cent a month ago.

The RBI's intervention has fuelled money supply growth and inflation, both running above its target band. With the central bank focused on taming inflation, many investors believe any further intervention will be muted in the near term, brokers said.

The dollar strengthened against some Asian currencies after strong March jobs data on Friday eased concerns about a slowdown in the US economy and dimmed the chances of a rate cut in the near term, dealers added.

UNI

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