The rupee gained 43 paise in the day to close at 52.67 against the American currency. Dollar selling by corporates and foreign inflows helped the rupee to rebound.

The domestic unit opened weaker at 53.10 (Wednesday's close: 53.06) a day after ratings agency Standard and Poor’s downgrade warning on India’s rating and weaker Asian markets.

“The rupee gained due to mild dollar selling and inflows from foreign investors,” a dealer with a public sector bank said.

A rating's downgrade will make foreign borrowing for Indian companies more costly.

Standard & Poor's, on Wednesday, had warned of a downgrade on India’s rating maintaining that there was still a “one-in-three chance of rating downgrade in the next 24 months”. This sent the rupee crashing below the 53-level mark.

The rupee had appreciated by more than 300 paise in September after the Government announced a series of policy measures aimed at boosting investors' sentiment.

The industry now waits for these announcements to translate into action.

The Government faces a twin dilemma of keeping the subsidy bill down to soothe foreign investors and rating agencies and not cutting the subsidy too much on the poor man's fuel -- diesel and kerosene.

Call rates firm; G-Secs eases

The overnight call money rates closed unchanged from previous close of 8.05 per cent.

The 10-year benchmark, 8.15 per cent government security, maturing in 2022 closed lower at Rs 99.90 (yield:8.16 per cent). IT had closed at Rs 99.94 (yield:8.15 per cent) on Wednesday.

>beena.parmar@thehindu.co.in

>Satyanarayan.iyer@thehindu.co.in

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