Mumbai: The rupee rose for the fourth straight day Thursday to close at a nearly two-week high of 55.26, up 23 paise, against the dollar on sustained selling of the American currency by exporters and some banks.
The sentiment was also in favour of rupee with inflows worth Rs 300 crore from FIIs coming into the stock market.
The local currency commenced sharply higher at 55.20 a dollar at the Interbank Foreign Exchange (Forex) market from the previous close of 55.49. It later moved in a range of 55.12 and 55.31 on alternate bouts of demand and supply.
The rupee finally closed at 55.26, a rise of 23 paise or 0.41 percent. In the last four sessions, the rupee has gained 49 paise or 0.88 percent against the US dollar.
Continued dollar offloading by exporters and some banks on hopes further fall in dollar value overseas mainly supported the rupee, said forex traders.
"The rupee strengthened to about two-week high tracking weakness in dollar index and rising equity markets. However, towards the fag end, the rupee pared some gains but closed on a firm note," said Pramit Brahmbhatt, CEO, Alpari financial Services (India) said.
The Indian stock market benchmark Sensex today washed out mid-session gains and closed nearly flat, pressurising the rupee to some extent at the fag-end, said traders.
The dollar index was down by 0.13 percent against a basket of six major currencies a day after minutes from the Federal Reserve latest policy meeting signalled that the US central bank is likely to introduce another round of monetary stimulus.
The New York crude oil was quoting below USD 98 a barrel.
Today's meeting of French and German leaders will be important from the Euro's perspective as they will be discussing about Greece, said Abhishek Goenka, Founder & CEO, India Forex Advisors. Although the volumes were low on the back of nationwide bank strike, we could see the Indian rupee gaining as the banks were selling the dollars, said Goenka.
The premium for the forward dollar fell back on fresh receipts by exporters.
The benchmark six-month forward dollar premium payable in January dropped to 162-164 paise from overnight close of 169-171 paise.
The premium for far-forward contracts maturing in July also dipped to 313-315 paise from 322-324 paise.
The RBI has fixed the reference rate for the US dollar at 55.1855 and for euro at 69.1584.
The rupee remained weak against the pound sterling to end at 87.71 from yesterday's close of 87.62 and also declined further to 69.36 against the euro from 69.07.
It also drifted further lower against the Japanese yen to 70.30 per 100 yen from last close of 70.00.
First Published: Thursday, August 23, 2012, 18:50