The rupee moved past 55 level against the US dollar for the first time in nearly six weeks

The rupee gained a massive 105 paise to move past the 55 level against the dollar for the first time in nearly six weeks on sustained capital inflows amid government measures to revive the economy, and continued selling of the American currency by exporters.
 

The dollar index surrendered its initial gains against its major six rivals in Asian trading hours on Tuesday, with investors on alert for European Central Bank and Bank of England action this week. The dollar index was trading nearly stable with upward bias, up by 0.02%, against six major currencies.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed higher at 55.35 a dollar from previous close of 55.43 and immediately touched a low of 55.44 on some hesistancy in local stocks.

It, later bounced back sharply to a high of 54.35 before settling the day at 54.38, up by 1.05 paise or 1.89 pct, registering fourth largest gain in absolute term in a last decade. The Indian benchmark sensex closed up by nearly 27 points or 0.15%, reports PTI.

The rupee had ended 18 paise higher at 55.43 against the dollar following sustained selling of the American currency by exporters and some banks in Monday's trade.

Forex dealers said apart from government's steps to revive slowing economy and falling rupee, robust capital inflows by foreign funds also supported the local unit.

Strengthening of euro and other currencies against the dollar in the overseas market and firm domestic equity market also supported the rupee.

The premium for the forward dollar eased on fresh receivings by exporters.

The benchmark six-month forward dollar premium payable in December fell back slightly to 178-180 paise from overnight close of 179-181 paise. The premium for far-forward contracts maturing in June also moved down to 323-325 paise from 325-327 paise previously.

The RBI fixed the reference rate for the US dollar at 54.8125 and for euro at 69.0615.

The rupee rebounded against the pound sterling to end at 85.31 from yesterday's closing level of 86.86 and also shot up further to 68.46 per euro from 69.90 previously.

It continued to rule sharply firm against the Japanese yen to settle at 68.15 per 100 yen from last close of 69.53.