Falling Inflation Helps Rupee Maintain Rally

The Indian rupee maintained its strength on speculations that falling inflation should attract overseas investors to nation’s assets. There are concerns, though, that buying of dollars by domestic importers may limit gains.

Wholesale inflation fell to 5.05 percent in January on an annual basis from 6.16 percent in December. Consumer inflation was at the two-year low of 8.79 percent. The rupee, which was rising previously on shrinking trade deficit, profited from the news and continued to rally.

USD/INR was down from 62.4255 to 62.0765 as of 11:05 GMT today.

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