January was best for Indian Rupee in 17 yrs

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The Indian rupee logged its best monthly gains in more than 17 years in January aided by a rebound in foreign fund inflows as investors bet on a monetary easing to accelerate growth in Asia's third-largest economy. The rupee appreciated from all time low Rs 54 (approx) to Rs 49.5 (approx)

Overseas investors bought Indian shares worth $2.1 billion so far in January, after net outflows of about $500 million in 2011, and invested $3.3 in debt.

On Tuesday, the partially convertible rupee ended at 49.44/45 to the dollar, after moving in a 49.3200 to 49.7425 range, and up from Monday's close of 49.79/80.

In January, the rupee has strengthened about 7.45% against the dollar, the largest monthly gain since the last month of 1994, Thomson Reuters data showed.

India's wholesale price index (WPI), the main inflation gauge, rose 7.47% from a year earlier, slowing from a 9.11% rise in November.

India's central bank will watch for a sustained fall in inflation before it moves ahead with a cut in policy rates, Reserve Bank of India Deputy Governor Subir Gokarn said on Monday.

Indian shares posted their best January rise since 1994, after gaining about 2% on Tuesday. The main index rose 11.3% in January, its first monthly rise in three, and the best month since September 2010.

The euro, shares and commodities all gained encouraged by hopes for a Greek bond deal this week and after European leaders backed a pact that is hoped will tackle the underlying causes of the region's debt crisis.

One-month offshore non-deliverable forward contracts were at 49.82 .

In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all ended around 49.8, on total volume of $4.6 billion.