MUMBAI: The rupee on Friday recovered sharply against the U.S. dollar and closed over 28 paise up at 40.8750/8850 on the back of smart rally in equity markets.

In active trading at the interbank foreign exchange market, the Indian unit opened strong at 41.09/11 a dollar against Thursday’s close of 41.16/17. Later, it improved further and closed at 40.8750/8850.

Fall in the inflation rate and consistent smart economic growth also aided the rupee firm up, although it largely drew support from petering out dollar demand.

Dollar’s weakness in international markets was attributed to indications of a possible interest rate cut. — PTI