The Indian rupee staged an incredible comeback after three straight weeks of downslide and ended at a fresh 2-1/2 month high of 67.08 against its US counterpart following massive selling of dollars by banks and exporters.
A large uptick in foreign capital inflows into debt and equities predominantly supported the domestic currency to sustain its spirited rally throughout the week - its longest winning run this year so far.Unwinding of long-dollar positions by speculative traders and the currency's strong underlying fundamentals further supported the highly bullish move.
India is one of the emerging market economies - the fastest growing economy in the world with a GDP growth rate of 7.5 per cent - weathering the current global growth slowdown crisis the best among other countries.The home currency recouped all its lost ground and gained by a whopping 154 paise or 2.24 per cent during the week.
After crashing to near historic low, rupee sentiment witnessed a sea change in the macroeconomic parameters on the government's commitment to its fiscal deficit target and also significant liberalisation of FDI norms in a host of sectors in its Budget proposals to push exports and attract more foreign investment. Finance Minister Arun Jaitley maintained the fiscal deficit target for 2016-17 at 3.5 per cent of the GDP.
The rupee has been a notable beneficiary of this post-Budget euphoria as well as hopes of robust capital inflows, said a forex trader.
