Rupee gains 53 paise against dollar

Paring all previous losses, the rupee today gained 53 paise to close at 50.87/88 against the US dollar as the stock market recovered, following government's assurance that it will not tax equity investments through participatory notes (P-Notes).

Besides, fresh dollar selling by exporters amid bearish cues from overseas forex markets also aided the rupee's value, dealers said.

At the Interbank Foreign Exchange (Forex) market, the local unit touched a low of 51.30 in the intra-day before ending at 50.87/88, a gain of 53 paise, or 1.03% from its previous close.

The rupee had touched an 11-week low of 51.40/41 yesterday.

Meanwhile, the BSE benchmark index Sensex today shot up by 345.59 points to 17,404.20 after Pranab Mukherjee cleared the air on the issue of P-Notes and said, "Indian tax authority would not go beyond financial investor [FIIs] to check the details about the P-Note holders. Accordingly, a question of liability for tax in India of the P-Note holder would not arise. Necessary clarification will be issued."

The dollar index was remarkably down by almost 0.4% against its major rivals while New York crude oil was trading above $103 a barrel in European market today.

The rupee premium for the forward dollar closed mixed on alternate bouts of buying and selling.

The benchmark six-month forward dollar premium payable in September softened to 168-170 paise from Thursday's close of 169-171 paise while far-forward contracts maturing in March edged up to 295-297 from 293-295 paise previously.

The RBI fixed the reference rate for the US dollar at 51.1565 and for euro at 68.3403. The rupee recovered slightly against the pound sterling to 81.52/54 from overnight close of 81.62/64 and also rose against the euro to 67.90/92 from 68.26/28. It improved against the Japanese yen to 62.06/08 per 100 yen from 62.49/51.