Fed Magic: Spot rupee near 9-yr high

The spot rupee today shot up by 20 paise to touch 40.28/29 per dollar, near its nine-year high, on expectations of more capital inflows on the back of the interest rate cut by the US Federal Reserve last night and a sharp rally in equity markets.

The rupee was trading around 40.24 per dollar in early noon deals.

The US Federal Reserve, yesterday, slashed the funds rate by fifty basis points to help the economy recover from recent financial turmoil.

According to dealers, this will lead to fresh foreign inflows in the domestic market as investors will prefer to invest in high-yielding currencies like the rupee.