Indian rupee jumps 73 paise to seven-week high against US dollar

The Indian rupee appreciated by a further 73 paise to close at an almost seven-week high of 61.73 against the US dollar on Thursday as the US currency weakened globally, following the budget impasse in Washington and fears of the Fed tapering its stimulus programme receded.

Dollar sales by exporters and firm local equities also supported the local currency.

The rupee opened at 62.15 a dollar from the previous close of 62.46 at the Interbank Foreign Exchange Market and touched a low of 62.22. It bounced back to a high of 61.65 before settling at 61.73, a rise of 73 paise or 1.17 per cent.

The rupee was at the highest level since August 16, when it closed at 61.65 against the dollar.

"The gains were mainly attributed to the sharp weakness in the US dollar index and strength in the euro," said Abhishek Goenka, CEO of India Forex Advisors. "The US dollar weakened globally following a failure by US lawmakers to resolve a budget impasse."

Finance Minister P Chidambaram had earlier said the value of the rupee based on the real effective exchange rate was 59-60 to a dollar.

"The trading range for the USD-INR pair is expected to be within 61.00 to 62.80," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).

Meanwhile, the 30-share BSE Sensex shot up 384.92 points, or 1.97 per cent. Foreign institutional investors pulled out a net Rs 106.97 crore of shares on Tuesday, according to provisional data with the stock exchanges.

The dollar index, a gauge of six major global rivals, was down by 0.07 per cent.

With inputs from PTI