Rupee regains prominence, registers 9 yr high at 41.58

Mumbai, Apr 23: The rupee today regained a fresh 9-year high to reach up to 41.58 against the USD buyoed by strong capital inflows in the morning session and even to mark a fresh nine year high.

But, later the domestic unit slipped to 41.69 and is trading at 41.68, traders said.

The domestic unit opened today at 41.64 against the last close of 41.76/77 on Friday.

At 1005 hrs, the partially-convertible rupee was at 41.625/635 per dollar off an early peak of 41.575, a highest since May 1998, dealers said.

A large section of the market suspected that the Reserve Bank of India (RBI) may intervene further to tighten its norms for external commercial borrowings (ECBs) in its monetary policy review tomorrow in a bid to stem the rupee's gains.

To thwart the home currency's rise, the RBI, in the past four months, has bought USD 19.7 billion, till February-end, and it had intervened in March as well, said one of the leading dealers today.

The apex bank's persistent intervention has fuelled inflation and money supply, which are both running above its target levels.

The trading volume would remain elevated as the rupee swung between buying by exporters, selling by carry traders and equity inflows, coupled with uncertainty over the central bank's stance on the currency, brokers added.

UNI