A smart recovery in domestic equities on the back of robust industrial growth data helped the Indian rupee rebound by 16 paise to 45.05/06 against the US dollar today despite sustained foreign capital outflows.
Fresh dollar selling by exporters and some banks amid dollar weakness overseas also helped the rupee regain ground against the American currency after two days of losses. In the past two days, the rupee has depreciated by 57 paise, or 1.28 per cent, against the US dollar.
In fairly active trade at the Interbank Foreign Exchange, the domestic unit opened slightly higher at Rs 45.18/19 per dollar against its previous close of Rs 45.21/22.
However, it fell back shortly thereafter to touch an intra—day low of Rs 45.35 per dollar, in tandem with the 168—point fall of the Bombay Stock Exchange benchmark Sensex in early morning deals.
The rupee later recouped to a high of 45.01 per dollar before ending at 45.05/06, after the stock markets rebounded on the back of double—digit industrial output growth at 10.8 per cent in October, as per the latest Index of Industrial Production data. The Sensex ended higher by 266.53 points, or 1.39 per cent, today.
Fresh dollar selling by exporters and some banks on the back of weakness in dollar overseas also aided the sentiment.
The dollar index was down by over 0.1 per cent against a basket of currencies in Europe today.
Even sustained selling by foreign funds could not stop the rupee’s ascent. Foreign investors pulled out USD 646.24 million from the Indian stock market during the three days from December 7.
Meanwhile, global crude oil was trading below USD 89 a barrel in London today.
The rupee premium for the forward dollar also recovered on fresh paying pressure from banks and corporates. The benchmark six—month forward dollar premium payable in May ended higher at 135—1/2—137—1/2 paise, as against 133—1/2—135—1/2 paise on Thursday.
Far—forward contracts maturing in November also closed higher at 232—234 paise, compared to 230—232 paise previously.
The Reserve Bank of India has fixed the reference rate for the dollar at Rs 45.22 and the euro at Rs 59.99.
The rupee remained weak against the pound sterling and closed at Rs 71.37/39 per pound against Thursday’s close of Rs 71.22/24. It also eased against the yen to Rs 53.92/94 per 100 yen from Rs 53.82/84 previously.
It, however, appreciated to Rs 59.67/69 per euro from the previous close of Rs 59.73/75.