India's rupee rises to three-week high against dollar

MUMBAI (AFP) - India's rupee rose to a three-week high against the dollar on Wednesday, after a string of record lows in recent months, as positive trade data boosted investor confidence and concerns over strikes on Syria eased.

The rupee firmed against the dollar to 63.07 during trading on Wednesday and closed at 63.38, up from its previous close of 63.85. Just two weeks ago the rupee hit a record low of more than 68 to the dollar.

"Some global tensions have eased. Exporters have been selling dollars expecting the rupee to be stable," said Param Sarma, chief executive with NSP Forex.

Positive economic data released on Tuesday has also helped, with Indian exports climbing by nearly 13 per cent in August on a 12-month basis, in a sign the falling rupee has started to help Asia's third-largest economy.

India reported a fall in trade deficit in August to US$10.9 billion (S$13.9 billion), down from US$14.17 billion in the same period a year ago, according to the commerce ministry figures.

The country's once-booming economy has been grappling with sharply slowing growth, high inflation and a record current account deficit, the broadest measure of a country's trade.

But the Indian currency started to rally since the appointment last week of a new central bank governor, former International Monetary Fund chief economist Raghuram Rajan, who began his tenure with a slew of fresh measures to aid the ailing rupee.

The Bombay Stock Exchange 30-share Sensex ended flat on Wednesday, up 0.36 points at 19,997.45 points.