The rupee jumped to a three-month high of 61.24 against the dollar due to a sharply narrow current account deficit (CAD) data and tracking stronger Asian market currencies.
At 1.25 pm, the domestic unit was trading at 61.31 per dollar.Released post market hours on Wednesday, India’s CAD showed a sharp fall at $4.2 billion in the December quarter compared with $5.2 billion in the previous quarter. The shortfall was equivalent to 0.9 per cent of gross domestic product (GDP).
This boosted the Indian currency amid persistent foreign inflows into the domestic markets. The BSE-benchmark Sensex was trading higher by 118 points (0.56 per cent) at 21,395 points in the afternoon trades.
The Indian currency opened at a seven-week high of 61.53 against Wednesday’s close of 61.77 at the Interbank Foreign Exchange market.Easing tension between Ukraine and Russia has also boosted Asian market currencies.
“Narrower current account deficit and sustained capital inflows are supporting the rupee,” a currency dealer said.
Developments in the run-up to the national elections will be one of the key factors influencing market movements. The polls will be held from April 7 to May 12.
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