Rupee Extends Gains As Trade Gap Narrows, Inflows Pick Up

The Indian rupee gained 0.4 percent to 68.8300 against the U.S. dollar today, its strongest level in more than seven months, driven by weakening greenback in overseas markets and sustained foreign inflows. It closed 0.8 percent higher at 68.53 against the dollar.

Besides, India’s balance of payments is swinging into surplus, ending a three-quarter string of deficits -- and helping to strengthen the rupee, a Bloomberg Intelligence report said.

Trade data released late on Friday showed that the gap had narrowed considerably, giving a big boost to the rupee which last year was the worst performing major currency in Asia. The trade gap was $9.6 billion last month -- the lowest in 17 months-- compared with $14.7 billion in January, and narrower than the $13.7 billion median estimate in a Bloomberg survey.

Global funds bought a near Rs 4,320 crore of stocks Friday, provisional NSE data showed, and snapped up Rs 2,490 crore of government bonds and Rs 610 crore of corporate debt the same day.

The local unit has gained for the sixth straight session and strengthened past the $69-mark for the first time since Aug. 10 of last year.