Rupee crosses 40-level mark

MUMBAI: The rupee on Thursday appreciated sharply by 30 paise and breached the 40-level mark to more than nine-year high of 39.90/91 against the US currency on heavy capital inflows triggered by interest rate cut by the US Federal Reserve.

In an active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency opened sharply higher at 40.03/05 per dollar from Wednesday's close of 40.20/21.

It later rose further to cross 40-mark to a high of 39.89 a dollar, before being quoted at 39.90/91 a dollar in late morning deals.

The rate cut by the US Federal Reserve on Tuesday paved the way for the rupee to breach the 40-mark for the first time since May 13, 1998 when it had ended at 39.85 a dollar.

The rupee has appreciated nearly 58 paise in last two days.

Weak dollar overseas and dollar selling by exporters also helped the rupee's surge, despite spiralling global crude oil prices, dealers said.

Forex dealers anticipated increased capital inflows in equity markets after cut in the US interest rate as dollar will get broadly affected by this move, ultimately impacting positively on the emerging markets like India.

The rupee also got support from biggest gain of 653 points yesterday in the benchmark sensex, which further consolidated on Thursday.

Though the rupee breached 40-mark, there was not much intervention from the apex bank to stem the rupee's rise.

Meanwhile, the global crude oil prices remained high over $82 a barrel in Asian trade on Thursday.