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| Indian rupee at fresh dollar high |
| The Indian rupee has risen to its highest level against the dollar since 1998 on the back of continuing foreign support for its booming economy.
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| INDIA
, 11-October-2007
1:58:28 AM |
| The rupee was worth 39.32 to the dollar in trading on Wednesday, maintaining a trend which has seen it rise 12% against its US counterpart this year.
Foreign demand for Indian shares and high levels of foreign investment have helped to propel the currency upwards.
But economists warned that the exchange rate was punitive for exporters.
'Strong fundamentals'
IT firms that have won a lot of software outsourcing contracts from US companies are likely to be worst affected
The rupee's ascent has matched that of the Indian stock market, whose benchmark share index climbed above the 18,000 mark for the first time on Tuesday.
Economists said they expected the trend to continue with the dollar weakening further before the end of the year.
"The fundamentals favour a strong rupee," said Ram Upendra Das, a trade economist.
"This trend will continue for some time unless there is a political crisis in New Delhi or a catastrophic natural disaster."
Foreign exchange dealers quoted by the Reuters news agency said the Indian Central Bank had intervened in the market on Wednesday to limit the rupee's rise, one claiming the bank bought up to $1bn in currency.
The central bank's own figures show it has purchased more than $38bn this year.
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