Indian Rupee Advances

For the past four weeks the Indian Rupee has continued to advance. This month long rally by the Indian currency has been fueled by speculation that overseas investors will increase their stock purchases to take advantage of the strong showing. This four week winning streak by the Rupee is the longest since January.

It wasn't so long ago that the Rupee was trading at a three-year low. It was back on July 19th when it sank to that particular level. It has rebounded nicely since that point. The Rupee got a helping hand after the Global Funds purchased the most Indian shares that it had since the previous May. This brought dollars back into the country.

"The recent improvement in the performance of stocks is helping the rupee recover some of its earlier losses," said Paresh Nayar, chief currency trader at Development Credit Bank Ltd in Mumbai. "The inflows are helping meet demand for dollars from importers, keeping the rupee stable."

After rising, the Rupee now stands at 46.50 against the dollar. A position that Nayar believes it will maintain.