Rupee at 4-month high, ends above 53-mark

Mumbai, Sep 21: The rupee on Friday gained a hefty 93 paise to close at over 4-month high of 53.45 on massive USD 430 million capital inflows, amid government lowering a tax for overseas borrowing by local companies and easing of recent political worries.





Heavy dollar selling by exporters and some banks on the back of weakness in dollar overseas also boosted the rupee sentiment, forex dealers said.

At the Interbank Foreign Exchange (Forex) market, the rupee opened higher at 54.15 a dollar from previous close of 54.38 and immediately touched a low of 54.20.

Helped by FII inflows worth Rs 2,327.82 crore (about USD 430 million), the rupee later rallied to a high of 53.33 before settling at a four-month high of 53.45 — up 93 paise, or 1.71 per cent over yesterday's close.

The unit also recorded its third successive week of gains.

Today's gain is one of the biggest gains logged by the currency in this year. On September 14, rupee vaulted 113 paise or 2.03 per cent to close at 54.30.

The buying in favour of rupee also received a boost after Finance Minister P Chidambaram today cut withholding tax on overseas borrowings to 5 per cent from 20 per cent, a move expected to bridge current—account shortfall that previously fuelled the slide in rupee.

The dollar index was down by 0.28 per cent against a basket of six major global rivals. This happened after reports said Spain and European officials were working together on a plan for economic reforms.