Rupee extends gains

The rupee extended gains for the second straight session in both the currency markets on Friday, as soft dollar demand and easing concerns over US-Iran war hysteria helped the currency rise, dealers said.

In the interbank market, the rupee closed at 154.83 to the dollar, compared with the previous closing of 154.88. The rupee also managed to gain 50 paisas against the dollar in the open market. The local unit ended at 155.20 versus the greenback. It had settled at 155.70 in the previous session.

Dealers said the rupee was likely to remain flat in the coming sessions. “The currency is strengthening due to few import payments, which increased supply of the greenback,” a dealer said.

“Healthy foreign exchange reserves, improvement in the current account balance and strong foreign inflows are expected to keep the rupee stable at the current levels.”

The central bank’s foreign currency reserves stood at $11.503 billion as of January 3, compared with $11.489 billion in the previous week. Dealers expect foreign financial inflows to remain high due to stable currency and improved current account balance. The current account deficit narrowed 73 percent to $1.821 billion in July-November FY20.