Mumbai: The rupee recovered smartly on 13 July to end at 40.4200/4250 against the greenback on the back of a strong surge in equity markets and consistent weakness in dollar overseas.
A day after heavy intervention by the Reserve Bank of India (RBI), the local currency bounced back in the absence of any dollar demand.
In active trade at the Interbank Foreign Exchange (forex) market, Indian unit resumed better at 40.47/48 per dollar from the previous close of 40.50/51 and later moved in a range of 40.4150 and 40.4950.
The RBI was absent in the exchange market after it reportedly bought $400 million the previous day, forex dealers said.
The rupee also drew support from surging equity markets on the back of consistent and heavy FII inflows in the current month as well as weak dollar against some major world currencies, they added.
The strengthening rupee has hurt exporters margins and in turn forced the central bank to contain the currency surge.
The government had announced a Rs1,400 crore relief package for exporters hit by rupee appreciation on 12 July.
The dollar fell to a record low against the euro in the last couple of days on worries that US sub prime mortgage sector problems could spread to other parts of the economy.