Mumbai: The rupee rose for the fifth straight session to close at a fresh 7-month high of 67.34, strengthening by another 20 paise on sustained selling of dollars by banks and exporters amid strong rally in domestic equity market.
The domestic currency was further supported by unwinding of long-dollar positions by speculators. The domestic unit resumed higher at 67.40 per dollar as compared to Wednesday's closing value of 67.54 at the Interbank Foreign Exchange market and kept the momentum going.
It touched a fresh intra-day high of 67.28 during the session on the back of heavy dollar selling before concluding at 67.34, revealing a smart gain of 20 paise, or 0.30 per cent. The rupee has been a notable beneficiary of this post-Budget euphoria as well as hopes of robust capital inflows and also supported by the long term potential of the Budget proposals.
It has gained by 138 paise, or 2.01 per cent in five days - the longest winning run this year so far. In the meantime, domestic equity markets continued their ferocious ascent for the third-straight session - its biggest post-Budget rally as sentiment turned highly buoyant following the government's commitment to its fiscal deficit target amid expectations of a rate cut from the RBI.
Finance Minister Arun Jaitley maintained the fiscal deficit target for 2016-17 at 3.5 per cent of the GDP. On the global front, dollar lost ground against the major currencies and traded almost flat, reversing earlier gains despite strong US economic data flows.
The dollar index, which measures the US currency's strength against major currencies, was trading at 98.14, down 0.04 per cent. The flagship stock market index Sensex jumped 364.01 points to end at 24,606.99, while 50-share Nifty rose by over 107 points to 7,475.60.
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