MUMBAI: Heavy sale of dollars helped the rupee bounce back and gain 15 paise to close at 44.84/85 against the US currency despite sustained capital outflows.
Dealers said that some recovery in local equities after recent heavy sell-off aided the recovery of rupee.
The Bombay Stock Exchange benchmark Sensex emerged from 4-month lows, gaining 54 points at 17,560 on strong buying in blue chips like RIL and Infosys at bargain levels, although overall investor sentiment remained jittery.
Foreign Institutional Investors (FIIs) took out USD 505.26 million from equities in straight seven sessions since June 10 but it did not put pressure on the rupee.
Alpari Forex (India) CEO Pramit Brahmbhatt said, "Strong equities and steady euro helped rupee to trade stronger against dollar. Equity markets showed strength throughout the day but at closing erased some gains due to dollar demand from oil importers which restricted rupee to appreciate. Expect Rupee to trade flat."
"The trading range for the USD/INR will be 44.80 to 45.30 tomorrow," he added.
India Forex Advisors CEO Abhishek Goenka said that as the markets managed to overcome the anxiety over the Mauritius tax issue, it resulted "in stock markets to ease thus helping the rupee to appreciate".
"Rupee has been tracking the local cues in stocks and should maintain weak. Exporters can target levels of 45.20 at least for covers while Importers needs to caution and cover on dips," Goenka added.