The Indian rupee rallied smartly for a second session to post its highest close in two weeks on Tuesday, helped by strong foreign fund inflows into a booming domestic share market, dealers said. The rupee ended 0.26 percent stronger at 43.8000/8200 per dollar, compared with Monday's close of 43.9200/9350. The currency, which briefly rallied to a peak of 43.76, last closed stronger at 43.7150/7250 on December 7.
The rupee has now gained 4.1 percent in 2004 to add to its 5.2 percent appreciation in 2003, bolstered by record high foreign fund investments.
Overseas portfolio investors have pumped in more than $8.1 billion into local shares, as they buy into companies poised for robust earnings growth in Asia's fourth-largest economy.
Rupee premiums on forward dollars eased, shadowing the spot rupee's gains. The annualised premium on the benchmark six-month dollar ended 17 basis points lower at 2.07 percent.
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