Indian rupee bounces back by 60 paise to 57.79 against dollar

The Indian rupee bounced back with a vengeance, gaining 60 paise to close at 57.79 against the US dollar, on fresh selling of the Greenback by exporters.

A firm dollar overseas and sustained capital inflows also could not stem the rupee recovery.

At the Interbank Foreign Exchange (Forex) market, the local unit resumed higher at 58.20 a dollar from overnight close of 58.39 but fell back to the day's low of 58.38. It later improved to a high of 57.73 before concluding at 57.79, showing a rise of 60 paise or 1.03 per cent.

In the last five trading sessions, the rupee had tanked by 195 paise or 3.45 per cent.

Alpari Financial Services (India) CEO Pramit Brahmbhatt said: "Today Indian Rupee recovered from the yesterday's fall, but the gains lacked conviction as the local currency remained in the shadow of weak domestic fundamentals, record current account deficit and high inflation. Today, Index of Industrial Production (IIP) data for April was out at 2 per cent, lower than the 2.7 per cent that the market was expecting whereas the Consumer Price Index-based inflation for May came in at 9.31 per cent which was above the estimates. The weak Local equities and strong dollar capped the Rupee gain. Expect spot USDINR pair to trade within 57.60 58.10."

The dollar index was up by 0.27 per cent against a basket of six major currencies.

The BSE Sensex closed further lower by 101.87 points while FIIs withdrew Rs 885.85 crore on Tuesday according to the provisional data with stock exchanges.

Meanwhile, taking note of the government's efforts to contain fiscal deficit, Fitch Ratings on Wednesday revised India's Outlook to Stable from Negative and affirmed 'BBB-' rating, which also arrested the rupee's fall and aided the recovery at the fag end.

With inputs from PTI