Rupee Recovers After Falling to 65.32/Dollar

The rupee recovered from its day's low of 65.32/dollar, aided by a rebound in Indian equity markets. At its day's high, the rupee edged up to 65.06.

On Thursday, the rupee ended at 65.10, which marked its sixth fall in a row. The partially convertible rupee last traded around these levels in September 2013 when the country was struggling with slow growth and high deficits.

The yuan's over 4 per cent devaluation over the last three days is the biggest reason for the sharp selloff in the rupee this week, analysts say. On Friday, the yuan firmed up against the dollar.

Dr Soumya Kanti Ghosh, chief economic advisor at SBI, expects the rupee to depreciate further from current levels. The yuan's recent fall is likely to weigh heavily on the Indian rupee, he added.

Selling by foreign institutional investors (FIIs) in the past three days had also pressured the rupee, analysts say. FIIs have sold cash shares worth Rs 3,000 crore since Tuesday. A weakening rupee is bad for foreign investors because returns get diminished because of currency depreciation.

At 10:51 a.m., the rupee was trading at 65.12/dollar while the Sensex was up 1.2 per cent.