Rupee climbs on capital inflows

MUMBAI:

The rupee climbed to its highest close in nearly a month on Friday, driven by strong capital inflows into the fast-growing economy, though sporadic central bank intervention limited gains, dealers said. The partially convertible rupee ended at 39.34/35 per dollar, its strongest finish since November 19, and up from the previous close of 39.395/405. It hit 39.16 last month, its strongest since March 1998. "There were strong flows from a single bank today, which put a lot of upward pressure on the rupee," said a dealer with a state bank. "But the central bank was there to see that the rupee did not appreciate too fast." Reserve Bank of India bought a record $12.544 billion in intervention in October to slow down a rising rupee, which has gained about 12 per cent this year, data showed on Friday.
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The Reserve Bank of India bought $64.5 billion in intervention in the first ten months of the year and is widely seen as having played an active role in the rupee market in November and December too. RBI will continue to allow greater flexibility in the foreign exchange market but will also intervene to keep the rupee stable, Deputy Governor Rakesh Mohan said on Thursday.