Rupee recovers

The Indian rupee recovered yesterday's losses and was up by 35 paise to close at a two and a half month high of 49.26/27 against the dollar in line with a smart rebound in local equity markets amid sustained capital inflows.

In active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed higher at 49.30/32 a dollar
from its previous close of 49.61/62.

It later moved in the range 49.23-49.52 before closing the day at 49.26/27 a dollar.

Firm trends in Asian equity markets, including India, mainly boosted rupee sentiment. The Indian benchmark Sensex ended higher by over 164 points or 1.37 per cent after yesterday's fall of about 178 points.

Asian indices also ended firm while European markets resumed better on the back of favourable Wall Street advice.

The weakness of the dollar against most of the Asian currencies also helped rupee recovery.

Meanwhile, oil prices rose towards USD 58 a barrel today in Asia, extending gains to near six-month highs on investor expectations that global economic growth may begin to rebound by the end of the year.

The Reserve Bank of India (RBI) fixed the reference rate for the US dollar at Rs 49.46 and the euro at Rs 65.63. Rupee premiums on the forward dollar ended stable.

The benchmark six-month forward dollar premium payable in October ended at 65-1/2-67-1/2 paise from 66-1/2-68-1/2 paise
on Wednesday and the far-forwards maturing in April finished steady at its previous level of 107-109 paise.

In cross-currency trade, the Indian rupee rose against the pound sterling, the euro and the Japanese yen.

The rupee firmed up against the pound sterling at Rs 74.22/24 against its previous close of Rs 74.42/44 while improved further against the euro to Rs 65.54/56 from Rs 65.91/93.

It shot up against the Japanese yen to settle at Rs 49.60/62 per 100 yen from the last close of Rs 50.44/46.