Mumbai: The rupee carried forward overnight gains and opened higher at Rs 44.08/09 against the US currency on the back of weak dollar overseas and tightening monetary policy by the central bank.
In active trade at the Interbank Foreign Exchange (FOREX) market, the Indian unit resumed better at Rs 44.08/09 a dollar from Wednesday’s close of Rs 44.1250/1350 per dollar and was quoted barely steady at Rs 44.09/10 in late morning deals.
The dollar hit a six-week low versus the euro and fell against other rivals yesterday after the head of Reserve Bank of India (RBI) said inflation worries were easing.
A combination of disappointing US data and solid economic reports from abroad had pressure on the dollar in Asian and European trading.
The RBI on Tuesday hiked the Cash Reserve Ratio (CRR) in order to contain inflation by checking the large funds flow from foreign countries by way of FDI and portfolio investment into the country, also boosted the rupee sentiment.
There was no intervention of the central bank today and the smart recovery in equity markets, with the benchmark Sensex gaining nearly 230 points in early morning trade also partly aided the rupee surge.