Rupee ends strong due to dollar sale by corporates, foreign banks

Markets have priced in narrow victory for opposition BJP and its allies in 543-seat lower house

The rupee ended strong due to dollar sale by corporate and foreign banks. During intra-day trades the rupee appreciates above the Rs 60 per dollar mark and touched an over one month high.

But in afternoon sessions dollar buying by state run banks led to rupee ending strong by just 8 paise.

The rupee closed at Rs 60.06 compared with previous close of Rs 60.14 per dollar. The rupee had opened at Rs 59.96 and during intra-day trades it even touched a high of Rs 59.92. The rupee had ended at Rs 59.90 per dollar on April 2.

“There was a lot of dollar supply in the market. Dollar sale by corporates and state-run banks helped the rupee to appreciate,” said Sandeep Gonsalves, forex consultant and dealer, Mecklai & Mecklai.

Markets have priced in a narrow victory for the opposition Bharatiya Janata Party and its allies in the 543-seat lower house of parliament.

"The exit polls should give some sense of direction to markets but the central bank will be present on either sides to curb excessive volatility," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank.

The rupee also benefited as shares recovered slightly from their lowest close in 1-1/2 months on Wednesday. Gains in the rupee also benefitted the bond market. The yield on the 10-year benchmark bond ended at 8.76% compared with previous close of 8.80%.