The rupee recovered by 24 paise to 72.95 against the US dollar in early trade on Wednesday, taking heart from the Reserve Bank's assurance that it will take appropriate actions to preserve financial stability in the financial market amid growing coronavirus fears.
At the interbank foreign exchange the rupee opened at 73.10, then gained further ground and touched a high of 72.90 against the US dollar. It was last trading at 72.95, showing a rise of 24 paise over its previous close.
On Tuesday, the Indian currency had fallen by 43 paise to close at a 16-month low of 73.19 against the US dollar amid concerns over the impact of coronavirus.
In a major reprieve for the financial market, the RBI on Tuesday said it is closely monitoring global as well as domestic situation regarding the impact of deadly coronavirus and ready to take necessary action to ensure orderly functioning of financial markets.
Globally, financial markets have been experiencing considerable volatility, with the spread of coronavirus, triggering risk-off sentiments and flights to safe haven, the Reserve Bank of India (RBI) said in a statement.
Meanwhile, global crude oil benchmark, Brent futures, rose 2 per cent to trade at USD 52.63 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.09 per cent to 97.24.
On the stock market front, the BSE benchmark Sensex was trading 72.78 points lower at 38,550.92 in early trade; while the broader NSE Nifty was down 14 points at 11,289.30.
Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold equity shares worth Rs 2,415.80 crore on Tuesday, according to provisional exchange data.
By the end of Tuesday, 2,981 people died of the COVID-19 and a total of 80,270 confirmed cases of the virus were reported in China, National Health Commission (NHC) reported on Tuesday.
The death toll due to the deadly disease across the world mounted to 3,123 and confirmed cases surpassed 91,783, official media here reported.