The rupee gained further ground against the US dollar to end at a nearly 17-month high of 65.30 in a fairly volatile trading on increased selling of the American currency by exporters and banks.
A weak dollar in overseas markets largely supported the up move despite a sell-off in local stocks.
Strong capital inflows to equity and debt markets also provided support, forex traders said.
The home currency opened modestly lower at 65.40 from Monday’s closing of 65.36 at the Interbank Foreign Exchange (forex) market and weakened further to 65.4450 due to fresh dollar purchases by importers.
However, selling of dollars by banks and some exporters helped the local unit to clock a smart recovery in late afternoon deals to hit a fresh intra-day high of 65.21 before ending at 65.30, revealing a rise of 6 paise, or 0.09 per cent. Today’s closing is nearly 17-month high for the domestic currency, which had ended at 65.27 on October 30, 2015.
Yesterday, the rupee had closed 10 paise higher against the green back.