The rupee ended marginally strong on Friday after hitting one month high due to dollar buying by the central bank.
According to currency dealers the Reserve Bank of India (RBI) has been doing a sell/buy swap in the forward market to reduce the impact of its spot intervention on rupee liquidity. Currency dealers also said that due to this dollar forward rates have been climbing up in the last few days.
The rupee ended at Rs 60.03 on Friday compared with previous close of Rs 60.06. The rupee had opened at Rs 60.10 and during intra-day trades it touched a high of Rs 59.92 per dollar. The rupee had ended at Rs 59.90 per dollar on April 2.
There are speculations in the market that the world’s largest democracy will elect a government capable of reviving economic growth. This is helping to attract dollar flows into domestic markets.
The main opposition Bharatiya Janata Party (BJP) is leading in opinion polls as voters seek to punish the ruling Congress party for graft scandals and an economic slowdown. The last round of voting will take place on May 12 and the results will be announced on May 16.
“Next week will be crucial for the rupee and the broad range is seen at Rs 59.60 to Rs 60.40 per dollar. RBI may continue to intervene in the market,” said a currency dealer with a state-run bank.