Rupee posts biggest weekly gain since Dec

The rupee completed the biggest weekly gain since December on speculation that the sliding US bond rates will spur global investors to seek higher-yielding emerging-market assets.

The currency touched the month’s high On Friday as 10-year treasury yields headed for the biggest weekly drop in three months after the Federal Reserve said on March 18 that it will purchase $1 trillion of debt. The rupee pared the week’s gains On Friday on concern refiners will increase dollar purchases after crude oil rose above $50 per barrel.

“The rupee is gaining from the widening India-US rate differential, which has triggered broad dollar declines,” said Krishnamurthy Harihar, head of treasury at Development Credit Bank in Mumbai. “The Fed’s move to buy bonds is going to keep the US interest rates low on a sustained basis.”

The local currency rose 1.7 per cent this week to 50.645 per dollar at close in Mumbai. It earlier touched 50.03, the strongest since February 26. The currency has rebounded 3 per cent from an all-time low of 52.1850 touched on March 3, trimming this year’s loss to 3.7 per cent. It slid 0.5 per cent On Friday.