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Rupee closes 15 paise stronger at 59.18 per dollar

LiveMint logoLiveMint 06-06-2014 Ravindra Sonavane

Mumbai: The rupee ended at 59.18 to the dollar on Friday, up 0.25% from its previous close of 59.33, which dealers attributed to the absence of any significant dollar demand in the foreign exchange market.

The currency touched a high of 59.11 during the day. The rupee has been on a steady course in recent sessions and is trading with an upward bias riding on optimism that foreign funds will continue to flow into the domestic financial market on expected improvements in economic fundamentals.

Since the beginning of this year, the rupee has gained 4.42%, while foreign institutional investors have bought $8.27 billion during the period from local equity markets. Most of the Asian currencies too were trading up. This week, the local unit has lost marginally against the dollar, dropping 0.14%.

Meanwhile, a Reuters poll of economists said the rupee will make only scant gains in the next 12 months as the economy remains weak, although optimism around a new government and a narrowing current account deficit will underpin the currency.

The rupee is among the best-performing emerging economy currencies this year. India’s benchmark index, Sensex ended at a fresh high of 25,396.46 points on BSE, up 1.51%.

The yield on India’s 10-year benchmark bond ended at 8.513%, compared with its Thursday’s close of 8.53%. Bond yields and prices move in opposite directions. India’s benchmark bond yield eased significantly this week after the Reserve Bank of India (RBI) signalled that it might ease policy rates if inflation continues to decline.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.418, up 0.06% from the previous close of 80.371.

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