MUMBAI: The rupee
on Thursday strengthened further by 43 paise to trade at fresh three-week high of 62.95 against the dollar in early trade boosted by consistent capital inflows and dollar sales by exporters. The domestic currency has spurted by 425 paise or 6.28 per cent in last five straight sessions. The rupee had gained 46 paise to close at 63.38 yesterday against the dollar on the back of fresh RBI steps to boost foreign fund inflows and hopes of a diplomatic solution in Syria.
Rupee could touch 70 against the U.S. dollar in a month or so, although some revival is expected in the currency by the end of the year, Deutsche Bank said in a report on Wednesday.
"We continue to believe that fundamentally the rupee is undervalued and has overshot its equilibrium level substantially, but as numerous episodes of past currency crises have amply demonstrated, under a scenario of deep pessimism, currencies can overshoot substantially and remain so for a long time," economists at the bank wrote in the report.
"India, we fear, is entering such a zone".
The partially convertible rupee dropped to a record low of 64.13 per dollar on Tuesday and was trading at 63.38/42 on Wednesday, weaker than its close of 63.25/26.
The rupee on Friday hit record low of 62 per dollar on heavy US currency demand supported by growing expectations that Fed may withdraw its bond buying programme by the end of this month amid growing signs of recovery in US Job market. Previously, rupee had hit all-time low of 61.80 on August 6.The rupee had lost 24 paise to close at an all-time low of 61.43 against he US currency in the previous session on Wednesday after July inflation rose to a five-month high. Forex market remained closed yesterday on account of Independence Day.Meanwhile, the BSE benchmark index Sensex has fallen by 457 points to 18,909 .
