The rupee rose for a third session on Tuesday to a near-two-week high, helped by capital flows into a rallying stock market, but traders said gains were restrained by a surge in the price of oil, India's biggest import.
Traders were also cautious ahead of an expected rate increase by the US Federal Reserve. The increase could narrow rate differentials between India and the United States and might impact the pace of foreign portfolio inflows, analysts say.
The Fed is expected to raise its key interest rate by a quarter point to 4.25 percent on Tuesday, but traders are awaiting an accompanying statement for any signs the US central bank might soon end its 18-month campaign of raising rates.
The partially rupee ended at 46.0950/1000, firmer than Monday's close of 46.11/12 and up nearly 0.4 percent in the past three sessions.
It touched a day's high of 45.99 in early deals before giving up some of the gains on dollar purchases by some large companies.
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