Mumbai:- Advancing for the seventh straight session, the rupee today surged by 10 paise to close at a nearly two-month high of 67.37 on sustained dollar unwinding from exporters and banks amid weak overseas trend.
Expectations of robust capital inflows following a positive and growth-oriented Budget to reduces macroeconomic volatility and fine tuning the economy through fiscal policy measures predominantly kept rupee on highly bullish trend.
The domestic currency has appreciated by a whopping 83 paise, largely outperforming all major Asian peers.
Moving ahead with the fiscal consolidation path, Finance Minister Arun Jaitley has pegged the fiscal deficit for 2017-18 at 3.2 per cent, down from 3.5 per cent expected in the current financial year.
Finance Minister Arun Jaitley also promised to liberalise FDI policy to attract capital flows in more sectors.
Moreover, additional fine-tuning measures to further improve ease of doing business, the government also decided to abolish FIPB and form a new mechanism that could include approvals by the ministries concerned for expeditious clearance of foreign investment proposals.
The overnight decision to maintain status quo on policy rates by the Federal Reserve and less hawkish outcome than expected further supported the sentiment.
At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed firmly higher at 67.44 from Wednesday’s close of 67.47.
But, it soon succumbed to fresh dollar pressure and retreated to touch a low of 67.5250 briefly before rebounding.
After trading range-bound rest of the day, it finally settled at 67.37, showing a smart rise of 10 paise, or 0.15 per cent, the level not seen since December 8, 2016.
In worldwide trade, the dollar slipped to 2-1/2 month lows against other major currencies after the Federal Reserve gave a less optimistic view of the economy than expected and as investors awaited the release of US economic reports later in the day.
The US dollar index was trading substantially weak at 99.40 in late afternoon session.
The RBI fixed the reference rate for the dollar at 67.4480 and for the euro at 72.7966.
PTI
