The rupee on Wednesday ended marginally higher by two paise at 49.91/92 against the U.S. currency on mild dollar selling by banks and exporters amid sustained foreign capital inflows.
Dealers said persistent selling of dollars by banks and exporters after continued foreign capital inflows into equity market ahead of RBI’s policy meeting on Thursday and Union Budget on Friday boosted the rupee against the dollar.
However, dollar demand from oil importers capped the rupee gains, they said.
The local unit hovered in a range of 49.83 and 50.02 at the Interbank Foreign Exchange (Forex) market before settling at 49.91/92, or 2 paise higher from its previous close.
Foreign institutional investors (FIIs) have made substantial purchases in last three days. FIIs bought shares worth a net Rs 872.69 crore on Tuesday as per provisional data from the stock exchanges.
Meanwhile, the BSE benchmark index Sensex ended higher by 106 points at 17,919.30.
However, in the New York market, the dollar extended gains against the Japanese yen on Tuesday, touching its highest level since last April and held on to an advance versus the euro, after the Federal Reserve noted shortcomings in the job market and housing sector, while seeing improvement in business and household spending.
Meanwhile, Inflation rose to 6.95 per cent in February because of sharp increase in food prices, especially vegetables and protein-based items.
U.S. crude oil was trading below USD 107 a barrel in London on Wednesday. The dollar index of six major currencies was up by 0.08 per cent in European market.