Bucking the weak trend in stocks, Indian rupee on Tuesday strengthened 13 paise to end at nearly one-week high of 61.67 against the greenback on persistent selling of dollars by banks and exporters on a day the RBI kept interest rates unchanged.
The rupee opened higher at 61.65 per dollar as against the yesterday's closing level of 61.80 at the Interbank Foreign Exchange (Forex) market. It moved up further to 61.61 per dollar on initial selling of dollars by banks. However, it fell to 61.84 per dollar in the afternoon on fresh demand from some banks before closing at 61.67 per dollar, showing a gain of 13 paise or 0.21% from its last close.
The rupee has now gained by 19 paise, or 0.31%, in two days and has closed at its strongest level since 61.41 on January 28, 2015. The local currency moved in a range of 61.61 per dollar and 61.84 per dollar during the day.
"Foreign inflows and hopes of rates cuts in the future continued to support the local currency. Foreign investors were net buyers of USD 120.68 million in Indian markets yesterday and purchased a total USD 6.818 billion in 2015," said Admisi Forex India, Director, Suresh Nair.
The Reserve Bank of India (RBI) earlier on Tuesday left repo rate unchanged at 7.75 per cent, but cut SLR by 50 bps to 21.50% from 22%. In international forex markets, the widely-tracked dollar index was down by 0.05% against a basket of major global rivals.
In the Tokyo market, the dollar was lower against the yen today, with investors seeking to take profits on overnight gains in the greenback. In the New York market, the Canadian dollar, Norwegian krone and Russian ruble rose against the US dollar yesterday as oil prices fluctuated. Meanwhile, the Indian equity benchmark Sensex dropped by 122.13 points, or 0.42 per cent, to close at nearly two-week low to 29,000.14.