The Indian rupee jumped around 1.5 per cent against the US dollar to pull back below the key 64.50 levels on Tuesday, triggering sharp gains in the stock markets. The partially convertible rupee is now on track for its fourth straight day of gains after snapping a three-week losing streak.
As of 09.16 a.m., the rupee traded at 64.33, up 1.4 per cent against Friday's close at 65.24 per dollar. Markets were closed on Monday on account of Ganesh Chaturthi.
The rupee is now trading at a two-week high. A surge in exports also helped sentiments.
India's merchandise exports posted double-digit growth in the month of August, while imports were "contained", trade secretary S. R. Rao said on Monday, offering some respite for the troubled rupee. Official data is due later this week.
The rupee tracked higher euro, which gained against the dollar after disappointing US jobs data raised hopes that the Fed Reserve may be hesitant to announce tapering of stimulus as early as next week.
Sentiment in the currency has improved since Reserve Bank of India governor Raghuram Rajan unveiled a slew of proposals to support the rupee and open up markets on Wednesday, providing a breath of fresh air for investors unnerved by the country's worst economic crisis in two decades.
The RBI has so far been the main line of defence against the rupee.
Stock markets are also on track for the fourth consecutive day of gains. The BSE Sensex, which has gained over 1,000 points in the previous three sessions, rose another 400 points in early trade today. The broader Nifty scaled above the key 5,800 levels on the back of strong gains in banking stocks.
Mayruesh Joshi of Angel Broking told NDTV that steps taken by Raghuram Rajan are not only aiding the Indian rupee, but also leading to a huge momentum in the Bank Nifty.
Source:- profit.ndtv.com
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