Besides strong foreign fund inflows, dollar’s weakness against other currencies overseas after data showed activity in the United States service sector slowed sharply last month, and a firm domestic equity market boosted the rupee value against the dollar, forex dealers said.
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Reserve Bank today fixed the reference rate of the rupee at 66.5469 against the U.S. dollar and 74.1665 for the euro.
Selling of dollars by some foreign banks and exporters also boosted rupee sentiment.
This is the highest closing level since May 11, 2016 when the rupee had finished at 66.56.
Forex dealers said that both debt and equity markets are attracting large inflows.
Indian companies have raised a total of $1.7 billion worth of funds in the last week of July, making it the highest amount raised from the worldwide dollar bond market in at least two years.
Local stock markets gained on Tuesday.
The rupee played catch up after an extended weekend as compared to its last Friday’s value of 66.82 at the interbank foreign exchange (forex) market and strengthened further to hit a fresh intraday high of 66.47 on heavy dollar unwinding.
The upside in currency was largely on account of weaker dollar after likely delay in Fed rate hike.
The SDR-rupee figure will be based on this rate, the statement added.
The forex markets were closed on Monday following Ganesh Chaturthi festivities.
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Dealers expect the rupee to remain in the range between 66.25 and 67 a dollar in the coming month with positive sentiment bolstering rupee outlook.
