India becomes 12th trillion dollar economy as rupee closes at 9-year high

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The rupee ended at 40.895/905 per dollar, off an intraday peak of 40.60 - its highest since May, 1998. It had closed at 40.90/91 on Wednesday, zooming past the 41 per dollar mark for the first time in nine years.

Continued dollar inflows in equity markets mainly helped the rupee's upsurge. Foreign Institutional Investors (FIIs), after remaining net buyers in last two weeks, pumped in $113.90 million on April 24.

No intervention of the central bank at initial stages also boosted the rupee sentiment.

At 10 a.m., Thursday, the rupee was at 40.74/76 per dollar, rising smartly from Wednesday's close of 40.90/91. The rupee reached a peak of 40.60 per dollar, its strongest since May 1998, according to Reuters data, on heavy dollar inflows and selling pressure from exporters.

However, it fell back to a low of 40.95 a dollar on some dollar buying by oil refinery companies to meet their import requirements as the global crude oil prices were quoting near $66 a barrel.

The greenback continued to remain bearish against most of the major currencies which helped the rupee rally in early trade.

According to forex dealers there may not be intervention of the central bank, the Reserve Bank of India (RBI), in near term till inflation eases.

The RBI fixed the reference rate for the US currency at Rs. 40.78 per dollar and for the single european unit (€) at Rs. 55.66 per euro.

The rupee premiums on forward dollar ended slightly better on sustained paying pressure from banks and corporates.

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