(1888PressRelease)
October 04, 2007 - Further gains in the value of the rupee may prompt India's central bank to buy dollars in order to stem the currency's appreciation, it has been claimed.
The rupee rose to 39.62 against the dollar on September 26th - its highest level since April 1998 - and was trading at 39.745 per dollar this afternoon (October 1st) in Mumbai.
"I think the central bank will be obviously worried by the rupee's rise as far as exports are concerned,'' V Rajagopal, chief currency trader at Kotak Mahindra Bank in Mumbai, told Bloomberg.
"That will keep the rupee under pressure."
News that the foreign exchange reserves of the Reserve Bank of India had surged to a record $235.9 billion in the two weeks to September 21st suggests that the bank had already been selling rupees for dollars in an attempt to suppress the rupee's value.
However, Rohan Lasrado, a currency trader at HDFC Bank in Mumbai, believes that the rupee's appreciation will continue.
"The flows from abroad are strong and persistent and are pressuring the rupee to rise further," he told the news agency.
"I am bullish on the rupee."
Detailed analysis of the impact of the rising rupee on the Indian economy can be supplied by Aranca, an end-to-end provider of on-demand, custom investment, business and economic research.
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