Re closes at a week's high; overall sentiment improves

The domestic currency gained as much as 82 paise to a dollar in the last three days, extending a turnaround of sentiment from Thursday last when rupee was at its all-time weakest point at 56.38 to a dollar. The rupee's 82-paise gain is the biggest winning streak against dollar in over 2 months.

Today at the Interbank Foreign Exchange (Forex) market, the rupee opened higher at 55.25 amid sustained dollar selling by exporters. It finally closed at 55.18, showing a rise of 20 paise or 0.36 per cent cent. The rupee rise was also helped by the improvement in the stock market, which notched up a gain of nearly 200 pints.

Forex dealers said in the global markets, the dollar movement was weak as investors' concerns eased over fears of Greece's exit from the Eurozone following an opinion poll showing that the party in favour of economic bailout package could win elections.

With India depending on imports for 80 per cent of its crude oil requirement, a stronger rupee helps in reducing the landed cost of the fuel.

Under the impact of weakening rupee, the oil marketing companies raised petrol prices by a hefty Rs 7.54-litre triggering widespread protests.

The rupee has depreciated over 12 per cent since early March has been driven by a combination of deteriorating global risk sentiment and weak domestic fundamentals.

"There was not much of demand for dollars today. The market is also slowly digesting the happenings of last week, which improved sentiments. Also, fading global risk aversion has helped rupee to appreciate today," said N S Venkatesh, Head of Treasury, IDBI Bank. (MORE)