The rupee rose to a five-and-a-half year high against the dollar today on fresh speculation about an immediate Chinese yuan revaluation. | |
| The Indian currency rose to a high of 43.26 per dollar, piercing its previous five-year intra-day high of 43.30 in February. |
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| The spot rupee witnessed a 16 paise appreciation during the day to close at 43.28. This is the rupee's strongest closing rate since December 1999, when it closed at 43.30 to a dollar. |
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| The revaluation rumours had their impact on the government securities market as well. With hopes of increasing liquidity following the rupee's appreciation, the prices of long- and medium-term paper moved up by 20-25 paise after opening lower following the Reserve Bank of India's (RBI's) auction of state development loans. |
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| "Irrespective of the Chinese revaluation, the rupee is expected to remain bullish on the back of inflows -- not necessarily portfolio investment but trade inflows as well," said K Jayaraman, head of foreign exchange, Ceylon Bank. |
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| "The markets are confident that a revaluation is on the cards. The market reaction is factoring this in. By the time it actually happens, the market will not offer a knee-jerk reaction," said Partha Mukherjee, head of treasury at UTI Bank. |
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