The rupee touched a nine-year high on Thursday on positive Asian cues and expectations of robust investment flows, but dealers remained cautious about provoking the Reserve Bank of India (RBI) into intervening.
At 9:45 a.m., the partially convertible rupee was at 39.66/67 per dollar, easing from an early high of 39.62, its strongest since April 1998, that was also tested on Wednesday before closing at 39.700/705.
The rupee has gained more than 11.5 percent this year, aided by massive capital inflows, to be Asia's best performing currency against the dollar.
Still, the spectre of central bank intervention loomed over the market. The RBI has been widely seen selling rupees in a bid to quell its rise.
The most recent data shows the central bank bought $38.1 billion in the first seven months of 2007 to slow the rupee's appreciation.
The RBI's intervention justifiable????
RBI Intervening when rupee hits 9-yr high!!
CA Nikita (Chartered Accountant) (4158 Points)
27 September 2007
CAclubindia
