Rupee rises 4.9% during current week

Rupee completed the biggest weekly gain in 13 years on hopes that Prime Minister Manmohan Singh, will revive efforts to sell public sector companies to attract foreign investment. The rupee advanced 4.9% this week, the most since March 1996, to close at 47.125 per dollar. The rally took gains this month to 6.5%, the best performance among the 10 most-active Asian currencies. The currency climbed to a 5 months high as Sensex this week rallied the most since 1992. The Government will sell stakes in companies as promised by the Congress party in its election manifesto, former finance minister Palaniappan Chidambaram, quoted as saying on May 18. The new administration, to be sworn in today, may start by resuming share sale plans for electricity producer NHPC Ltd., explorer Oil India Ltd. and fuel retailer Hindustan Petroleum Corp., according to Mumbai-based brokerage Religare Capital Markets Ltd. FIIs increased share purchases than they sold by US$1.1bn on May 19, the most since June 2007, taking the net this month to US$3bn. Sensex jumped 14.1% this week. India’s "modest" dependence on exports will help the economy weather the global recession and recover this year, reducing the need for further stimulus, central bank Governor Duvvuri Subbarao said today. Asia’s third-biggest economy expanded at the slowest pace since 2003 in the quarter ended Dec. 31. Offshore contracts indicate that the rupee will trade at 47.22 to the dollar in a month, compared with expectations for a rate of 49.70 at the end of last week. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the rupee.