Rupee touches fresh nine-year high of 40.22

MUMBAI: The rupee gradually approached the crucial 40-mark on Monday, touching new nine-year high of 40.22 against the US currency in early trade, drawing strong support from pouring down portfolio investments into Indian equity.

Foreign investments crossed $10 billion so far in the currency year after a record single month inflow of $5.8 billion in July.

In fairly active trade at the Interbank Foreign Exchange (forex) market, the local currency resumed strong at 40.22/23 per dollar from overnight close of 40.28/29 a dollar but later was quoted at 40.2450/2550 a dollar in late morning deals.

The absence of dollar demand from oil refiners as well as any major intervention by the central bank in the face of unceasing flow of foreign investments helped rupee's surge to new highs, forex dealers said.

Asian markets, including Indian bourses, remained strong and the benchmark Sensex soared by 127 points this morning.

Traders said the rupee is likely to breach 40 level in the near future if the Reserve Bank of India did not intervene aggressively in the exchange market.