Mumbai: The Indian rupee rose further on Wednesday afternoon tracking gains in the local sharemarket which rallied over 3% and also buoyed by higher regional currencies.

At 3:20pm, the partially convertible rupee was at Rs47.06/07 per dollar, stronger than its previous close of Rs47.40/41.

Shares were trading up about 3.3% following the finance minister’s comments on Tuesday.

The government will maintain its fiscal stimulus due to uncertainty arising from a poor monsoon and the global outlook, finance minister Pranab Mukherjee said on Tuesday, as data showed the summer crop could post a bigger-than-expected fall.

Foreigners have bought more than $14 billion of local equities so far this year, after being sellers of more than $13 billion in 2008.

The dollar retreated from a one-month high against a currency basket on Wednesday as traders braced for a policy decision from the Federal Reserve, which was seen keeping its promise to keep interest rates low.

The dollar index, a gauge of the US units performance versus six majors, was down 0.4%.

In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were both quoting at Rs47.1425 respectively, with the total traded volume on the two exchanges at about $2.4 billion.