Rupee hits 8-month high on back of strong dollar inflows

Rupee hits 8-month high on back of strong dollar inflowsAfter gaining 31 paise on Tuesday, the Indian rupee strengthened further to hit its highest level in around eight months in morning trade on Wednesday.

The rupee was trading at 60.18/19 per US dollar at 9:06 a. m. on Wednesday, representing a notable gain from its close of 60.48/49 on Tuesday. At one point, the partially convertible currency hit 60.17 per dollar, its highest since 30th of July last year.

On Tuesday, the domestic currency closed at 60.48 against the US dollar, up gained 31 paise from its previous close of 60.79. The currency gained strength on the back of strong inflows of dollar from foreign institutional investors.

Amar Ambani, head of research at IIFL Limited, said, "A bottoming-out of India's GDP growth, inflation reasonably under control and near-term stability in the rupee will support further market upside. Foreign institutional investors are likely to remain overweight India."

After the rupee jumped to its highest level in nearly eight months, SGX CNX Nifty Index futures for delivery in March jumped 0.4 per cent to 6,638 at 9:45 a. m. in Singapore. The Bank of New York Mellon India ADR Index of U. S.-traded shares gained 0.8 per cent. The underlying CNX Nifty Index jumped 0.1 per cent to 6,589.75, while the S&P BSE Sensex remained almost flat.

Foreign institutional investors brought a net $265 million into India on March 24, extending this year's inflows to $2.84 billion, the highest among as many as eight Asian countries tracked by Bloomberg.