Mumbai: The rupee rose against the dollar on Wednesday as investors bought the local unit anticipating renewed overseas buying of emerging market assets, after shares rose in the United States and Asia, dealers said.
At 10 a.m., the partially convertible rupee was at 39.627/635 per dollar, gaining from the previous finish of 39.66/67.
Billionaire investor Warren Buffett offered to take on $800 billion of US municipal bond risk, helping lift stock markets.
His offer eased fears of credit downgrades at US bond insurers forcing the sale of billions of dollars of muni bonds.
“Buffett’s offer has certainly boosted sentiment, and should bode well for the Sensex,” said a dealer with a foreign bank, referring to India’s benchmark share index.
Indian shares rose more than 2% in early deals, boosted by firm Asian markets, after falling 11% over the previous five sessions.
Most Asian stock markets reacted positively to the Buffett offer, but their gains were limited by persistent worries about the health of the US economy.
Some traders said that dollar purchases by some importers would keep a lid on the rupee, as would the prospect of central bank intervention.
The Reserve Bank of India is widely seen playing an active role in stemming rapid appreciation of the rupee.