Rupee up on suggestion to hike diesel price

Written by Reuters | Updated: Oct 31 2013, 09:39am hrs
The rupee gained on Wednesday, recovering from earlier losses after a government panel recommended an immediate increase in state-subsidised diesel prices, reducing some of the concerns about the country's finances.

India should immediately raise diesel prices by about 9.5% or R5 a litre, a government panel said on Wednesday. The rupee also got a boost after RBI governor Raghuram Rajan said the central bank risks excessive tightening given the lag in monetary policy.

The market is getting bullish after the diesel recommendation. The immed-iate direction, however, depends on the Fed meet outcome, Ashutosh Raina, head of foreign exchange trading, HDFC Bank, said.

The rupee closed at 61.2350/2450 per dollar compared with 61.31/32 on Tuesday