The rupee on Wednesday rallied smartly after a steady start against the US currency largely due to heavy dollar sales by corporates, buoyed partly by a strong trend in equity markets.
In fairly active trade at the Interbank Foreign Exchange (forex) market, the Indian unit opened steady at Rs 46.27/28 per dollar from Tuesday's close of 46.2750/2850 per dollar and later shot up to Rs 46.17/18 a dollar in late morning deals.
Heavy corporate dollar sales and absence of any dollar demand from oil companies triggered a sharp rupee rally, a leading forex dealer said.
Global oil prices were at a low of USD 63.79 a barrel in Asian trade on Wednesday morning.
The Bombay Stock Exchange key index spurted by 164 points during morning trading, providing support the strengthening rupee, dealers said.
Meanwhile, the dollar was higher against the yen in overseas markets on Tuesday.