MUMBAI, Dec 30: The rupee was lifted by robust foreign capital inflows to its strongest close in 11 weeks on Friday, but the currency still ended 3.5pc weaker on the year to register its first annual depreciation in 4 years.
The partly convertible rupee ended at 45.03/04 per dollar, 0.28 per cent stronger than Thursday’s 45.155/165 close.
Besides the inflows, we also saw a good deal of year-end squaring up as most of the market had been sitting long (dollars), a dealer at a state-run bank said.
With volumes thin and very little demand for cash dollars, the (dollar) sellers dominated, lifting the rupee up.”
Overseas portfolio investments, at a record of some $10.6 billion in 2005, have helped offset downward pressure on the rupee this year from a widening trade deficit and the dollar’s broad gains.—Reuters
