Snapping its two-day losing streak, the Indian rupee on Wednesday appreciated by 22 paise to close at 47.70/72 per dollar on expectations of heavy capital inflows, as stock markets rallied after government promised to push economic reforms and ease credit costs.
The local currency opened higher at Rs 47.55/56 per dollar as against the Tuesday's closing level of Rs 47.92/93 before ending at Rs 47.70/72 per dollar.
It moved in a range of Rs 47.51 and Rs 47.80. However, some of the morning gains were pared due to month-end demand for dollars from oil refiners and importers and rise in global crude oil prices, dealers said.
Global oil prices rose to USD 63 per barrel as better- than-expected consumer-confidence data boosted hopes of economy recovery.
According to dealers, rally in stock market was the main reason for the appreciation in rupee against the US dollar. The stock market benchmark Sensex today shot up by 520.41 points or 3.83 per cent after Finance Minister Pranab Mukherjee promised to push for lower credit costs and higher infrastructure spending.
Foreign institutional investors are said to be stepping up their capital inflow into Indian equities on hopes for further economic reforms by the new government. Besides, firming global trends also helped boost the sentiments on the domestic bourses.