The rupee appreciated by 42 paise to 71.59 in early trade after the new RBI Governor Shaktikanta Das stressed on the need for a consultative approach to tackle the pressing economic issues.
According to forex dealers, a strong domestic equity market the dollar’s weakness against some currencies overseas boosted the local unit.
“The new RBI governor’s first speech confirms our initial impression that he is likely to be more communicative and consultative in his approach, which is a positive,” Japanese financial services major Nomura said in a research note.
The rupee opened on a strong note at 71.70 against the US dollar, then appreciated further to 71.59 showing a rise of 42 paise over its previous closing. On Wednesday, the rupee had declined by 16 paise to 72.01 per US dollar.
Traders however said that significant foreign fund outflows and rising crude oil prices weighed on the domestic currency and capped the upmove. Foreign funds sold shares worth Rs 1,299.43 crore from the capital markets on a net basis, while domestic institutional investors bought shares worth Rs 1,121.29 crore on Wednesday.
The global benchmark Brent crude was trading higher by 0.68 per cent at 60.56 per barrel. Meanwhile, the 30-share BSE benchmark Sensex jumped 206.27 points to 35,985.34 and up 206.27 points and the 50-share NSE index Nifty gained 61.30 points to 10,798.90.