<div>The rupee strengthened on Monday to its highest level in nearly a week, boosted by the Reserve Bank of India chief's comment on reluctance to "overtighten" monetary policy after leaving interest rates unchanged in a surprise move last week.<br /><br />Governor Raghuram Rajan said the central bank had tilted towards keeping rates on hold even before November consumer and wholesale price inflation data were released.<br /><br />In an interview to television channel ET Now, he said when growth is weak, we have to be careful of "over-tightening".<br /><br />"The governor's comments helped the rupee a bit. At least the market now thinks that the central bank will consider growth as well when framing monetary policy," said Hari Chandramgethen, head of foreign exchange trading at South Indian Bank.<br /><br />"I expect some support for the dollar/rupee around 61.65 levels with the pair broadly holding in a 61.60 to 62.40 range until the year-end."<br /><br />The partially convertible rupee closed at 61.9525/9625 per dollar compared with 62.04/05 on Friday. The rupee rose to as high as 61.8350 after Rajan's comments, its highest level since December 18.<br /><br />Traders said gains in the domestic share market throughout the day also boosted sentiment for the rupee.<br /><br />Indian shares edged higher as blue chips gained on continued foreign inflows despite last week's decision by the U.S. Federal Reserve to start reducing its bond purchases, although a fall in Infosys Ltd capped broader gains.<br /><br />Dealers will continue to monitor movements in other Asian currencies and the euro for near-term direction in the absence of any major domestic factors, with volumes also lower on account of year-end holidays globally.<br /><br />In the offshore non-deliverable forwards, the one-month contract was at 62.42, while the three-month was at 63.23.<br /><br />(Reuters)</div>
