Mumbai: The Indian rupee and bond prices closed higher on Wednesday following a decline in global crude oil prices after Saudi Arabia signalled that its production capacity will be back to normal by month end.

The domestic currency gained the most in six months to hit a five-week high, while government bond yields declined nearly 11 basis points, its steepest fall in nearly two month.

The rupee closed 0.78% higher at 71.24 to a dollar, its biggest gain since 18 March, from its Tuesday's close of 71.44. The rupee had opened at 71.49 and touched a high and a low of 71.17 and 71.52, respectively.

The yield on the 10-year government bond fell 11 basis points to 6.624% compared with its previous close of 6.732%. Bond yield and prices move in opposite directions.

Crude oil prices fell over 6% after Saudi energy minister Prince Abdulaziz bin Salman on Tuesday said the kingdom’s oil production capacities were fully restored and that output will be back to pre-attack levels by the end of September.

In the past two days, crude prices have surged nearly 14% following drone attacks on Saudi’s oil facilities.

Meanwhile, traders await the outcome of the US Federal Reserve’s policy meeting due later today. The central bank is widely expected to cut interest rates for the second time this year as policymakers try to get ahead of economic risks emanating from a global slowdown and US President Donald Trump’s trade war.

The benchmark equity index Sensex closed 0.23% higher at 36563.88 points. So far this year, the index has risen 1.2%.

In the year so far, the rupee has weakened 2%, while foreign investors have bought nearly $6.68 billion in Indian equities and $4.35 billion in debt.

Asian currencies were mixed today. The Singapore dollar and Hong Kong dollar fell 0.1%, Japanese yen 0.09%, Malaysian ringgit 0.05%. However, Indonesian rupiah was up 0.13%, Taiwan dollar gained 0.12%, China renminbi 0.05%, and Philippines Peso 0.04%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.28, up marginally from its previous close of 98.261.