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Upgrade a shot in the arm for rupee
BS Banking Bureau in Mumbai |
January 24, 2004 13:01 IST
The lifting of India's long-term foreign currency rating to investment grade by Moody's Investors Service resulted in the spot rupee rising by around six paise to 45.34 against the dollar on Friday.
This was despite an average foreign currency inflow of $60-70 million against a daily average of $110-120 million.
Dealers said the rating upgrade has led to the rupee's appreciation, though dollar inflows were not matching.
The bond market remained flat with prices across maturities moving in a range of 5-10 paise.
During the later part of the day, the market turned volatile after the rise in the wholesale price index-based inflation rate to 6.21 per cent was announced.
The market, after a dip, recovered with the yield on the 10-year benchmark paper closing at 5.12 per cent against 5.14 per cent on Friday.
According to dealers, the impact was not evident in pricing differences as the upgrade in the outlook of India has already been factored in.
The spot rupee opened at 45.36/37 to a dollar and closed higher at 45.35, following heavy dollar buying by nationalised banks.
Premiums on forward dollars also came off with the six-month and one-year annualised forward premiums closing at 0.6 per cent and 0.54 per cent, respectively.
The premiums slipped as the inter-bank players winded up long positions and sold dollars.