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The rupee racked up strong gains to end at a fresh two-and-a-half month high of 64.07 against the US currency, appreciating by 12 paise on heavy dollar selling amid expectations of a rate cut by the Reserve Bank tomorrow.
A spectacular rally in local equities along with steady dollar unwinding by exporters and some foreign banks also aided the recovery momentum, a forex dealer said.
This is the highest closing for the home currency since May 15, when it had ended at 64.05 against the dollar.
The uptrend in the domestic currency was supported by wide expectations that the central bank will slash rates in its Wednesday’s policy meet to propel investments and economic growth against the back drop of softening inflations.
The two-day RBI policy meet concludes tomorrow.
At the Interbank Foreign Exchange (forex) market, the local unit opened substantially higher at 64.10 against the dollar versus overnight close of 64.19.
While keeping the favourable momentum intact, it moved in a tight range of 64.05 and 64.14 most part of the day, before ending at 64.07, showing a smart gain of 12 paise, or 0.19 per cent.
Yesterday, the rupee had ended 4 paise lower at 64.19.
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