The rupee on Tuesday gained nine paise to close at 53.21/22 against the dollar amid a strong rally in local equities and fresh dollar selling by exporters.
Foreign exchange dealers said weakening of the US currency in global markets amid slowdown in capital outflows helped the rupee to recover. However,some dollar demand from importers capped rise of the rupee, they added.
At the Interbank Foreign Exchange (Forex) market, the local unit moved between 53.10 and 53.30.
Meanwhile, the BSE benchmark index Sensex ended up by 421.44 points at 15,939.36 on Tuesday, supporting the increase in rupee's value to a large extent. A smart rally in equities indicate that foreign institutional investors (FIIs) might return to markets. FIIs sold shares worth $7.33 million yesterday.
The dollar index, consisting of six major rivals, was down by nearly 0.6 per cent while New York crude oil was trading above USD 101 a barrel in European market on Tuesday.
Call rate downward
call rate reacted downwards at the overnight call money market on Tuesday on excess liquidity in the banking system. The rate fell back to finish at 8.50 per cent from yesterday's closing level of 9.00 per cent.