Rupee notches up 56-paise gain; GAAR postponement lifts mood

Treasury managers in banks said steps announced by the Reserve Bank regarding FCNR and export credit also lifted the rupee sentiment.

At the Interbank Foreign Exchange (Forex) market, the domestic unit opened weak at 53.63/64 and logged an intra-day low of 53.76 on early sharp fall in local equities due to negative global advices.

Moving in tandem with stocks, where late buying emerged after deferring of GAAR, the domestic unit started gaining, as exporters and some banks started selling dollars on hopes of more capital inflows in view of GAAR postponement.

The local currency bounced back to a high of 52.85 before concluding at 52.91/92, a rise of 1.05 per cent. In last four sessions, it had plunged by 0.93 paise, or 1.77 per cent.

"Announcement of deferring GAAR by one year has lifted mood. Rupee has got the initial support from the steps announced by the RBI regarding FCNR and export credit during the day," Moses Harding, executive vice president, Head, ALCO and Economic & Market Research, of IndusInd Bank, said.

Finance Minister Pranab Mukherjee in Parliament today deferred the implementation of General Anti-Avoidance rules (GAAR) by one year from April 2013. Certain provisions in GAAR which had led great concerns among foreign investors

Forex dealers even a firm dollar overseas could not able to stem the rise in the rupee.

Meanwhile, the BSE benchmark Sensex closed up by 82 points after recovering intra-day losses of over 300 points. (MORE)