The rupee on Wednesday strengthened by 18 paise, breaking its two-day losing string, to close at 55.47 against the dollar on robust capital inflows in the stock market and exporters selling the American currency ahead of the outcome of a key US Federal Reserve meet.
At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced lower at 55.75, which was also to be the day?s low.
Amid FIIs pumping in over R441 crore in stocks, the rupee bounced back to a high of 55.43 before concluding at 55.47, a rise of 18 paise or 0.32%. In the previous two days, rupee lost over 30 paise against the dollar.
Bond yields ease
Indian bond yields eased on Wednesday, in what was seen as a momentary retreat from the one-month highs hit in the previous session, given expectations the central bank would abstain from debt purchases, depriving markets of a near-term driver.
The benchmark 10-year bond yield eased 2 basis points to close at 8.23% from the previous close. It had risen to 8.28% on Tuesday, its highest in a month. One potential positive factor for bonds could be the return of P Chidambaram as finance minister given his reformist image.