Rupee snaps 3-week losing streak

The rupee broke a three-week slide as the selling by foreign funds tapered off after the Government said that it will announce a comprehensive stimulus package on Saturday to bolster the economy. The RBI too was scheduled to announce a fresh round of rate cuts to revive lending to consumers and companies. The local currency rose 1% this week to 49.60 a dollar after hitting an intra-week high of 49.55. FIIs were net buyers of US$111.1mn on Dec. 4, the most since Nov. 3, according to the latest data from the Securities & Exchange Board of India (SEBI). Also, India’s foreign exchange reserves rose for the first time in 10 weeks, indicating the central bank didn’t sell dollars. The currency has rebounded almost 2% from a record low of 50.60 struck last week. But, it is still down 21% this year. The rupee may climb to 48 by June 30, according to some analysts. Offshore forward contracts show traders scaled back bets for how far the rupee will weaken in the next month for a fifth day. Non-deliverable contracts show the currency will trade at 50.03 a month from now, compared with expectations for 51.26 a week ago.