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The rupee recovered 62 paise on Wednesday to close at 57.77 against the dollar on the back of dollar selling by exporters and stronger Asian currencies.
Further, comments from officials that the government is considering taking steps to bolster the currency also boosted the sentiments.
On Tuesday, the domestic unit had plunged to a new low of 58.98 in the intra-day trade before pulling back due to supposed intervention by the Reserve Bank of India.
The rupee opened 15 paise higher at 58.24 on Wednesday as against the previous close of 58.39 against the dollar. During the day the currency moved in the range of 57.72 to 58.38 per dollar.
“The weakness in the US dollar and the strength in the Euro have lent a helping hand to the rupee. In addition, the revised outlook of India by Fitch further contributed to the appreciation in the rupee during the closing hours, said Abhishek Goenka of India Forex Advisors.
Global ratings agency Fitch Ratings revised India’s outlook to ‘stable’ from ‘negative’ on the back of measures taken by the government to contain the budget deficit.
Dealers said that the rupee continues to face challenges from India’s rising current account deficit and macro-economic indicators.
Going ahead, we feel rupee is likely to continue with its correction till 57.50 - 57.25 levels, Goenka said.
Call rates, G-Sec
The inter-bank call money rates ended higher at 7.25 from the previous close of 7.15 per cent. Intra-day, the call money market moved in the narrow range of 7.15 to 7.35 per cent.
The 8.15 per cent government security, which matures in 2022, opened flat from the previous close of Rs 104.08. The G-Sec closed higher at Rs 104.17, while yields softened to 7.50 per cent from 7.52 per cent.
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