Rupee rises for 2nd day; RBI action helps unit gain 27 paise

At the Interbank Foreign Exchange (Forex) market, the domestic unit opened lower at 56.02 as against its previous close of 55.64 on dollar buying by importers, mainly oil refiners, to meet their month-end requirements. Soon after, it touched an intra-day high of 56.07 against the US dollar.

However, Reserve Bank's intervention and dollar selling by exporters on hopes of further fall in dollar value overseas helped the rupee conclude at 55.38, showing a rise of 27 paise or 0.49 per cent. The rupee was also helped by the euro moving up from its two-year lows against the dollar.

"Rupee recovered today due to intervention from the central bank also with improved sentiment after yesterday's speech of RBI Governor," T S Srinivasan, GM (Treasury), Indian Overseas Bank said.

Yesterday, the rupee had gained 35 paise, snapping a three-day session of losses, after RBI indicated it may sell dollars directly to oil companies.

Dealers said sentiment got a further boost after RBI Governor D Subbarao today called on Prime Minister Manmohan Singh and discussed the rupee issue.

However, the strength in rupee in the last two days of this week did not help it from logging the eighth straight week of losses, its longest losing streak since October 2008.

The rupee's over 13 per cent depreciation since early March has been driven by a combination of deteriorating global risk sentiment and weak domestic fundamentals.

Meanwhile, the BSE benchmark Sensex today ended nearly flat (lower by 4.48 points) after gaining over 274 points or 1.72 per cent yesterday. (MORE)