The rupee posted its biggest single-day gain in more than a decade on Tuesday, driven by another rise in shares, heavy dollar sales by a large corporate, and the unwinding of long dollar positions by banks.
The partially convertible rupee closed at 47.69/71 per dollar, 2 percent stronger than 48.64/65 at Monday's close. It was the biggest single-day gain for the rupee since Jan. 19, 1998, when the rupee had risen 3.6 percent after the central bank had taken a number of steps including a hikes in the cash reserve ratio, repo rate and bank rate.
"Closing below 47.75 looks bullish for the rupee, it may strengthen beyond 47 per dollar if it holds near these levels tomorrow," . One-month offshore non-deliverable forward contracts were quoting at 48.02/22 per dollar, weaker than the onshore spot rate, but much stronger from 51-52 levels seen last week, indicating some improvement in rupee sentiment.
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