Rupee recovers sharply against dollar

A fall in the dollar against world currencies in overseas markets aided the Rupee to recover by 19 paise.

A sharp fall in the dollar against major world currencies in overseas markets on Friday aided the Rupee to recover sharply by another 19 paise in early trade at the Interbank Foreign Exchange (Forex) market.

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The rupee also derived support from a sharp rally on the stock markets, which zoomed by 408 points in early trade.

The Indian unit opened sharply higher at Rs 46.10/14 per dollar from an overnight close of Rs 46.28/29 a dollar and later strengthened further to Rs 46.07/08 per dollar in late morning dealings even as the month-end pressures was already over.

Forex dealers credited the dramatic recovery in rupee value mainly to the dollar's weakness in global markets.

In New York markets, the dollar tumbled on Thursday after the Federal Reserve surprised investors with a policy statement, which the markets took as sign of a pause in the Central Bank's tightening cycle.

While the Fed's decision to raise its benchmark interest rate by 25 basis points to 5.25 per cent was largely expected, the accompanying policy statement caused the dollar to drop immediately, according to dealers.