The Indian rupee (INR) posted its biggest quarterly gain since the September quarter of 2012, as heavy foreign buying of equities and debt boosted the local unit. The upward momentum of INR now means that the currency is on track to register its best quarterly performance since 2012. Further, this shows that INR has successfully managed to shake off the record low it plummeted to last year.
Optimism for a new government has been one of the major causes for the rupee’s rise, as economists expect a new regime would be able to hasten economic recovery of the world’s largest democracy. Easing in inflation earlier this year has also eased some of the downward pressure on the rupee. Moreover, economists are now forecasting that economic growth would increase from a decade low, as budget and current account deficit shrink.
INR also breached the 60-per-dollar mark for the first time in eight months, prompting RBI to put up some stiff resistance.
Foreign funds have purchased a net $3.7 billion in equities from the start of 2014 until March 27, while in debt, the net inflows stand at $5.8 billion.
Partially convertible rupee closed at 59.91/92 per dollar compared with 60.31/32 on Thursday. The rupee rose to as high as 59.68, its strongest since July 30. The rupee rose 3.15% in the March quarter, its best quarter since the 4.96% rise in the September quarter of 2012. In the month, the unit gained 3.1%, making this its best month since September 2013.
INR continued its winning streak against USD registering a close of 59.91 against previous month’s close of 61.75, reflecting 3.1% gain MoM. It broke the long-time support at 60.84 in spot. With a high of 68.87 and low of 52.83, we can see rupee testing level of 58.95, reflecting 61.8% correction as per the Fibonacci levels.
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