Rupee up 93 paise, ends at 53.45 vs dollar

The Indian rupee bounced back with a vengeance by 93 paise, strongest gain in last one year in absolute term, to end at 4-1/2-month high of 53.45 against the Greenback on the back of sharp rally in local equities buoyed by easing political worries coupled with government notifying its decision to allow FDI in retail, aviation and broadcasting sectors.

Friday's rise was also the third biggest gain in absolute term in last eight years. Previously, the rupee had spurted on November 11, 2008 by 119 paise and on September 22, 2011 by 124 paise.

Heavy dollar selling by exporters and some banks on the back of weakness in dollar overseas and heavy capital inflows, though FIIs were net sellers yesterday with small lots, too boosted the rupee sentiment, a forex dealer said.

Despite decision taken by UPA ally Trinamool Congress to withdraw support, Samajwadi Party Chief Mulayam Singh Yadav gave a support to UPA government to keep communal forces away, which mainly supported the market.

At the Interbank Foreign Exchange (Forex) market, the local unit opened higher at 54.15 a dollar from previous close of 54.38 and immediately touched a low of 54.20.

However, it later rallied to a high of 53.33 before settling at 53.45, showing a rise of 93 paise or 1.71 pct.

The Indian benchmark Sensex closed sharply higher by 403.58 points or 2.20 pct.