In choppy trade, the Indian rupee on Thursday recovered by 16 paise to close at 50.02/03 against the greenback following expectations of increased capital inflows due to a sustained rise in local equity markets.
In a see-saw trade at the Interbank Foreign Exchange (Forex) market, the local unit opened firm at 50.02/03 per dollar from Wednesday’s close of 50.18/19.
It later moved erratically in a range of 49.86 and 50.10 in synch with the volatility in domestic share markets before ending the day at its opening level of 50.02/03 a dollar. On April 8, it was down by 14 paise.
Foreign institutional investors (FIIs) continued their buying spree and they pumped in $273.50 million in three trading sessions since April 1.
Forex dealers attributed the recovery in the rupee to bullish equity markets, where the Indian benchmark closed higher by another 61.52 points or 0.57 per cent.
In straight six sessions of winning, the Sensex gained 1,235.72 points or 12.91 per cent.
Asian indices also ended firm today with a gain between 1.38 per cent and 4.30 per cent due to the rally on Wall Street.
Meanwhile, global crude oil prices were trading near $51 a barrel in Asian trade on Thursday.
Other firm Asian currencies also supported the rise in the rupee.
In the meantime, inflation declined to a three-decade low of 0.26 per cent in the fourth week of March from 0.31 per cent in the previous week as the economy faces slowdown, raising expectations of rate cuts by the RBI in its monetary policy later this month.
India's industrial production (IIP) contracted by 1.2 per cent in February, compared to 9.5 per cent growth a year ago, despite stimulus packages announced by the government.
The Reserve Bank of India, however, fixed the reference rate for the dollar at Rs 49.91 and the euro at Rs 66.34. The rupee premiums on the forward dollar ended lower on fresh receivings by exporters.
The benchmark six-month forward dollar premium payable in September ended down at 65-67 paise from 69-71 paise on Wednesday and far-forwards maturing in March also closed lower at 104-106 paise from 108-110 paise previously.
In cross-currency trade, the rupee rose against the pound sterling, the euro and the Japanese yen.
The domestic unit hardened against the pound sterling to end the day at Rs 73.30/32 from its last close of Rs 73.71/73 and also strengthened against the euro to Rs 66.28/30 from the previous close of Rs 66.41/43.
It recouped against the Japanese yen to Rs 49.95/97 per 100 yen from the overnight close of Rs 50.20/22.
Source : profit.ndtv.com