Rupee turns around on yuan revaluation talk

MUMBAI:>>The rupee fell sharply on Thursday, but turned around and ended
higher on talks of likely revaluation of the Chinese yuan and as exporter


Forex Converter Convert
Rs.To sold dollars, dealers said. The partially convertible rupee ended at
44.46/47 per dollar, after scoring a day's high of 44.40 in late trade. 


The unit had closed at 44.54/55 on Wednesday. The rupee moved in a band
of 44.40-44.73 in the day. The unit had touched 44.31 during trade on
Wednesday, its strongest since Sept. 8, 2008. China is very close to
announcing a shift in its currency policy, the New York Times reported
on Thursday. The change would involve a "small but immediate" revaluation
of the yuan and would permit the yuan to fluctuate more widely, the paper
said. 


Dealers expect the rupee to open strong on Friday on likely strong capital
inflows. "In light of weakness of the euro and strong growth displayed by
emerging markets, all emerging markets are showing great strength,
" said R.V.S. Sridhar, senior vice-president of treasury at Axis Bank.
"As long as the global problem persists capital inflows will flow into 
India and the rupee will appreciate," he added. 


The rupee climbed 2.7 percent in March, its biggest monthly gain since
May 2009, on the back of foreign portfolio inflows of about $4.4 billion,
and has strengthened a further 1.1 percent since then. Sridhar said the 
rupee rise may be limited till 44.20 on Friday due to likely dollar buying.
"The rupee has already rallied quite a bit on good inflows. So, there may 
be some support seen at 44.20," he added. The one-year forward dollar 
premium ended at 3.13 percent, up from 3.07 percent on Wednesday. 


The one-month offshore non-deliverable forward contracts were at 44.40/50,
near the onshore spot rate. In the currency futures market, the most traded
near-month dollar-rupee contracts on the National Stock Exchange ended 
at 44.56 and on its rival exchange MCX-SX at 44.55. The index of the dollar
against six major currencies was up 0.36 percent.