After the stock markets, the rupee is now on a dream run against the US dollar. Hitting exporters — especially software companies — hard, the Indian currency zoomed past the psychological barrier of 44 per dollar mark on Monday to its highest level since April.An unprecedented 49 paise rise drove the rupee to close at 43.64/65 per dollar, thanks to bunched up weekend dollar supplies from robust foreign fund and trade inflows amidst a sliding dollar overseas. A rise in the rupee means you pay less to buy $1. Also when you sell a dollar, you get less rupees on conversion.Any rise in rupee hurts exporters hard as they get less for every dollar earned. But it helps importers to cut costs. Software companies are likely to see their earnings coming down due to the plunging dollar. A strong rupee also helps the Indian tourist to pay less in rupee terms while shopping abroad.On Monday, the rupee opened firm at 44.02 per dollar due to a tumbling dollar against major global rivals. With Monday’s massive 49 paise gain, the rupee has appreciated by a whopping 140 paise since November 25.Foreign exchange market dealers attribute the rupee rise to a continuous flow of heavy FII and trade funds. ‘‘Apart from this, a tumbling dollar overseas also drove the rupee to new multi-month highs with the outlook upbeat for further gains,’’ dealers said.However, fears of a RBI intervention in defence of the rupee may contain further steep gains. FII investments in India are expected to rise further, thereby accelerating the current bull run in the forex market, bankers said. FIIs have so far invested over $7.5 billion in the Indian market during the current calendar year. In November itself, FII inflows were at $1.78 billion.Heavy investment inflows and revaluation of currencies led to a surge in the country’s foreign exchange reserves by a record $1.82 billion to over $126 billion during the week ended November 26.Analysts said remittances of export proceeds, FIIs and revaluation of global currencies contributed to the spurt in reserves and the rupee. The positive outlook on FII inflows and the dollar’s global decline would further strengthen the rupee in the near to medium-term, traders said. ‘‘The outlook for the rupee is very strong,’’ said a chief dealer at a private sector bank.
