Currency Report for the month of April 2009: Nirmal Bang

Currency Report for the month of April 2009: Nirmal BangThe rupee rose by 0.5%, on account of strong flow on overseas portfolio investments in surging equity markets. Foreign investors bought $1.3 billion more Indian shares than they sold in April, the biggest monthly purchases since December 2007 according to Data from SEBI. The FII flows into debt market stood at $490 million in April. US dollar could further turn weak, reflecting the health of the US economy, which is mired by recession and a huge deficit, against other global currencies. This could give further strength to rupee. The currency also strengthened on speculation that India's economy, forecast by the central bank to grow at 6 per cent in the financial year that started April 1, would weather the global recession better than most other emerging markets.

Dealers said the dollar's losses against major currencies and a strong rupee in the offshore non-deliverable forward markets were also a key factor boosting rupee sentiment. The dollar index .DXY, a gauge of the U. S. performance against six major currencies, was down 0.8 percent. Dealers also said monthend import payments by oil refiners kept a lid on the rupee's rise. BSE sensex had risen more then 40 percent from their 2009 lows in early March, and the foreign buying since then has helped lift the rupee from a record low of 52.20 per dollar in early March. The dollar appreciated up against the yen by 0 .66% but lost ground against most major currencies some of its safe-haven gains. The fall in the dollar has sent the euro to its increase by 0.89%.The euro dropped versus 12 of the 16 mostactive currencies after the European Commission said the euro-area economy will shrink 4 percent this year, a contraction twice as deep as projected three months ago.