Falling crude oil prices helped the rupee record its highest gain in over five years on Tuesday. The Indian currency appreciated by 112 paise against the dollar.
After making a strong opening at 71.34 a dollar, as compared to the previous close of 71.56, the currency gained further in the day to close at 70.44 a dollar, which is 1.5% higher than the previous close.
The Brent crude, an international benchmark, was trading 2.26% lower at $58.26 per barrel, a 14-month low.
Dollar weakening against all global currencies as well as the dollar selling by exporters, helped the domestic currency to gain.
The fall in oil prices will help narrow the current account gap as the country imports about 80% of its crude requirements. Current account deficit has widened to 2.9% of GDP for the July-September quarter due to higher trade deficit, as compared to 1.1% during the same period of the previous year.
Currency traders said said a softening bond yields due to easing liquidity concerns and bullish trend in stocks also helped the rupee strengthening against the dollar.
The benchmark Sensex Tuesday wiped off early losses to end 77 points higher at 36,347 on Tuesday, the sixth consecutive session of gains. The broader NSE Nifty edged higher by over 20 points to end above the 10,900-mark.
(With PTI inputs)
