NEWS / Foreign Debt

Rupee rises for 4th week

MUMBAI: India's rupee advanced for the fourth week, the longest winning streak since January, on speculation overseas investors will step up stock purchases to take advantage of a rally.

The rupee traded close to the highest in more than a month after global funds on Wednesday bought the most Indian shares since May 5, helping bring in dollars into the country.

The currency, which touched a three-year low on July 19, has gained more than 1% since, spurred by the stock inflows.

"The recent improvement in the performance of stocks is helping the rupee recover some of its earlier losses,'' said Paresh Nayar, chief currency trader at Development Credit Bank Ltd in Mumbai. "The inflows are helping meet demand for dollars from importers, keeping the rupee stable.''

The local currency rose 0.1% this week to 46.47 against the dollar at the 5pm close of trading in Mumbai on Friday, according to foreign-exchange broker Kanji Pitamber & Co.

It will remain near 46.50 to the dollar in coming days, Nayar said.

Growth in Asia's fourth-biggest economy, which averaged more than 8% in the past three financial years through March, is luring investors as the benchmark Bombay Stock Exchange Sensitive index rallied more than 25% since mid- June, following a plunge to the lowest since December.

The rupee's advance was slowed by speculation importers will sell the currency after it rose close to the highest level in more than a month.

Local oil refiners, who buy almost three-quarters of their annual crude requirement from abroad, typically benefit from a stronger rupee as they can buy more dollars at a cheaper rate. "We're not advising anyone to buy the rupee at these levels,'' said LV Prasad, chief currency trader at IndusInd Bank Ltd in Mumbai. - Bloomberg