Rupee recovers 18 paise against US dollar | business | Hindustan Times
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Rupee recovers 18 paise against US dollar

The Indian rupee recovered by 18 paise to 42.47/48 against the US currency in late Wednesday morning deals on smart recovery in equity markets.

business Updated: Jul 30, 2008 11:53 IST

Snapping four-session of losing streak, the Indian rupee on Wednesday recovered smartly by 18 paise to 42.47/48 against US currency in late morning deals on steep fall in global crude oil prices and smart recovery in equity markets.

At the Interbank Foreign Exchange (Forex) market, the local unit resumed sharply higher at 42.51/53 from Tuesday's close of 42.65/66 and improved further to quote at 42.47/48 a dollar in late morning deals.

Dealers attributed recovery in the rupee to sharp fall in global crude oil prices below USD 122 a barrel. US crude oil fell to USD 120.42 a barrel on Tuesday, its lowest in nearly three months, and was trading at USD 121.77 in early Asian trade on Wednesday.

The rupee also got support from smart recovery in equity markets where the Indian benchmark Sensex was up by nearly 254 points at 1030 hrs. Asian indices were also trading firm on Wednesday morning.

Tuesday's announcement of first quarterly review of annual monetary policy this fiscal by the Reserve Bank of India (RBI) also pushed the rupee upwards.

The RBI hiked key short-term lending rate by 0.5 per cent and mandatory cash reserve requirement (CRR) by 0.25 per cent to contain inflation. A hike in repo rate would suck out about Rs 8,000 crore from the banking system to moderate credit growth.

But according to dealers, the rise in the rupee might cap following month-end dollar demand from oil refiners.