Rupee appreciates

The rupee strengthened on Wednesday, as dollar inflows due to remittances and sale of greenback by exporters helped the currency appreciate, dealers said.

The rupee gained 40 paisas to close at 158.25/dollar in the interbank market. It had ended at 158.65 on Tuesday. Dealers said continued inflows of workers’ remittances and exporters’ dollar sale pushed the rupee higher during the trade.

“The rupee will appreciate further on the back of more inflows and positive sentiment,” a currency dealer said. “The exchange rate in real effective terms remains below the 100 mark, reaching 97.5. This shows more currency gains ahead.”

In the open market, the rupee ended higher at 158.70 against the dollar, compared with the previous closing of 158.90. Forex dealers said the ongoing spell of geopolitical uncertainty stemmed from the revoking of Kashmir’s special status by the Indian government and China-US trade war didn’t hit the investors’ sentiment in the currency market.

The National Security Committee took several major decisions in view of the recent developments regarding occupied Kashmir, resolving to downgrade Pakistan's diplomatic relations and suspend all bilateral trade with India.

China’s decision to let its yuan plunge through a previously sacrosanct level means a tit-for-tat trade conflict could morph into a currency war, injecting volatility into long-dormant foreign exchanges and piling pressure on world markets.