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After hitting new low after Tuesday's trade, the rupee today strengthened to more than '1% to touch Rs 57.79 following Fitch's upgrade of India outlook to 'stable' from 'negative. Abetment in debt sell off by foreign institutional investors also helped the rupee to strengthen.
“The rupee depreciation had nothing to with change in fundamentals; it was a result of FIIs pulling out of all emerging markets, including India” said Mohan Shenoi, president, group treasury and global markets, Kotak Mahindra Bank. “Since the sell off has been abetted today we saw strengthening of rupee” he added.
On Tuesday, rupee had touched Rs 58.98 level during the intraday trade. It had finally closed at Rs 58.38 a dollar.
The Reserve Bank of India, apart from asking public sector banks to sell dollars on Tuesday has taken some steps to increase the inflows in the country.
RBI asked exporters at special economic zones to realise their dollar earnings and get them back into the country within one year in a bid to increase the supply of dollars in the market. Central bank also increased the amount that exporter can bring to online payment channels to $10,000 from $3,000.
