Rupee at 25 month high

The rupee surged to its highest level in more than two years against the dollar on Oct. 7, as the US currency weakened in the overseas markets amid growing talk of fresh Quantitative Easing by the Federal Reserve to revive economic growth. But a drop in local stocks and concern that the RBI may intervene in the market curtailed the weekly gains in the partially-convertible Indian currency, which fell the most in a month on Friday. The rupee ended on Friday at 44.4350 against the dollar after touching 44.1150 in the previous session, its strongest level since Sept. 1, 2008. The rupee has gained 5% in the past month, the best-performance among the 10-most traded Asian currencies. It had closed at 44.1950 on Thursday.



The rupee is expected to rise above the 44-per-dollar mark soon if FII inflows continue unabated and the greenback continues to be under pressure in the international markets. The IMF this week raised India's 2010 GDP growth forecast to 9.7% from 9.4% earlier and dealers said this could boost foreign fund investments in the country. The Indian economy expanded by 8.8% in the quarter ended June 30. FIIs have poured in a record US$20bn into Indian equities so far this year, with more than a quarter of that having come since the start of September. Last year they had pumped in US$17.5bn in Indian stocks.