The Indian rupee climbed to its highest in nearly two weeks on Monday, rising beyond 45.00 per dollar as state-run Indian banks stayed out of the market and allowed it to benefit from dollar weakness abroad.
State-run banks have been in the market frequently in the past month or so to buy dollars and curb rupee gains, probably on behalf of the central bank, but a dealer at a foreign bank said they were largely absent on Monday. "Bids from nationalised banks have vanished," the dealer said.
The dollar slid to a three-month low against the yen after the Group of Seven said China should let its currency appreciate as a way of fixing global imbalances.
The rupee was quoted at 44.9825/9950, according to Reuters data, compared with Friday's close of 45.1450/1500. It fell through support at 45.00 on April 12 and went on to hit its lowest in nearly four months at 45.40 the day after.
Large capital inflows from foreign funds, who are heavy investors in the stock market, have supported the rupee this year, offsetting downward pressure from higher oil prices and a widening trade deficit. India imports two-thirds of its oil.