Snapping its five-day losing run, the rupee on Tuesday rebounded from 11-month lows to close with a hefty 32-paise gain at 56.44 against US dollar on heavy selling of the American currency by exporters amid signs of FII inflows.
The rupee derived strength from speculation that the government is likely to raise soon the cap on FII in G-secs by USD 5 billion, which will lead to more inflows.
The local currency had lost 119 paise in the past five sessions on rising worries over current account gap and fears that withdrawal of US stimulus will hit inflows from overseas.
At Interbank Foreign Exchange (Forex) market, rupee resumed higher at 56.56 a dollar from last close of 56.76 -- an 11-month low. It later moved in a range of 56.39 and 56.73 on alternate bouts of demand and supply before ending at 56.44, rise of 32 paise or 0.56 per cent.
The rupee’s recent weakness had prompted analysts to say the currency can revisit its all time low of 57.32 touched last June-end. RBI Governor D Subbarao has told the news agency in an interview that the central bank does not target any particular exchange rate or any band for the rupee.
Meanwhile, Sensex on Tuesday failed to build on the early gains and closed with a loss of nearly 65 points at over one-month low of 19,545.78 on fag-end selling in consumer durables and rate-sensitive banks, realty and auto shares.
The Bombay Stock Exchange 30-share barometer resumed almost stable and moved up further to a high of 19,742.70, a rise of over 130 points on buying in capital goods, oil & gas, and healthcare shares.