Mumbai: The rupee on Friday bounced back in style to end at a one-week high of 65.01 against the US dollar after Moody’s upgraded the country’s sovereign rating.
In its biggest single-day surge in six weeks, the home currency settled the day with a solid 31 paise gain.
The rating upgrade comes after a gap of 13 years – Moody’s had last upgraded India’s rating to ‘Baa3’ in 2004.
Stamping one of the most significant milestones, the global credit rating agency Moody’s today upgraded India’s sovereign credit rating by a notch to ‘Baa2’ with a stable outlook.
The rupee today hit an intraday high of 64.60 before giving back some win due to suspected RBI intervention.
There is an air of optimism on India’s economic prospects and created an ambiance of feel good factor following Modi government’s continued commitments towards strong governance and sweeping reforms measures, a forex dealer said.
A rally on domestic equities further supplemented the currency momentum in a healthy way.
Earlier at the Interbank Foreign Exchange (forex) market, the home currency made a stellar start with the huge gap-up at 64.75 against overnight close of 65.32 underpinned by the Moody’s decision to upgrade the ratings amid massive dollar unwinding.
Maintaining its dominance over the greenback, the rupee touched an intra-day peak of 64.60 in mid-morning deals.
However, the local currency gave back some of its early strong gains following RBI’s suspected intervention in the currency market through public sector banks to curb runaway rupee rally.
It finally closed at 65.01, showing a steep rise of 31 paise, or 0.47 percent.
For the week, the local unit appreciated by a good 15 paise against the USD.
In cross-currency trades, the rupee recovered sharply against the Pound sterling to finish at 85.79 from 86.16 per pound and strengthened against the Euro to settle at 76.71 from 76.82 earlier.
The Indian currency, however fell back against the Japanese yen to end at 57.75 per 100 yens from 57.71.
On the global front, the greenback drifted moderately lower against other major currencies as ongoing uncertainty over the fate of a major US tax reform plan and concerns over an investigation into Donald Trump’s presidential campaign weighed.
The dollar index, which measures the greenback’s value against a basket of six major currencies, was down at 93.64 in early trade.
In forward market today, premium for dollar continued to show weakness due to sustained receiving from exporters.
The benchmark six-month premium payable in April edged down to 127-129 paise from 128-130 paise and the far forward October 2018 contract also moved down to 266-268 paise from 268.50-270.50 paise yesterday.
On the International energy front, crude prices remained under pressure on rising US supplies and doubts over Russian support for continuing a cut in crude output, despite OPEC showing willingness to extend an ongoing production cut beyond March 2018.
Brent crude futures, the international benchmark for oil prices, were at USD 61.23 per barrel, down 13 cents from their last close.
US West Texas Intermediate (WTI) crude futures were at USD 55.32 a barrel, up 18 cents.
PTI
Rupee spurts 31 paise to end at one-week high of 65.01 vs USD
