The Indian rupee hit a fresh eight-week closing high on Wednesday, extending gains into a fourth straight session, helped by dollar inflows from a US based pharmaceutical company buying a stake in a local firm.
The partially convertible rupee, which was overvalued by nearly three percent on a trade weighted basis, closed at 46.15/1650, 0.24 percent higher than the previous close of 46.26/46.27.
It came off an intra-day high of 46.0950 as some state-run banks bought dollars but it was not clear whether the purchases were made on behalf of the central bank.
The rupee has depreciated 2.4 percent this year but has recovered from a three-year low of 47.04 hit in July. "There were huge (dollar) inflows from a pharmaceutical company," a dealer with a foreign bank said.
"There was a lot of interest to sell dollars even in the offshore market as they were getting out of long dollar positions," he said. Dealers said the sentiment was in rupee's favour, helped by softer oil prices and inflows into shares.