The rupee on Tuesday gained 23 paise to 53.54 against the US currency in the late morning trade on fresh selling of dollars by banks and exporters driven by persistent capital inflows from foreign funds.

The local unit resumed higher at 53.61 per dollar as against the last closing level of 53.77 per dollar at the Interbank Foreign Exchange (Forex) Market and firmed up further to 53.38 per dollar before quoting at 53.54 per dollar at 10.40 hrs (IST).

Banks and exporters preferred to reduce their dollar position in view of sustained capital inflows from foreign funds into equity market.

Foreign institutional investors (FIIs) bought shares worth a net Rs. 842.95 cr on Monday as per provisional data from the stock exchanges.

In overseas market, the US dollar held steady on Monday against most major currencies and the yen rebounded from a two-year low as the Bank of Japan began a two-day policy meeting.

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