The Indian rupee climbed to a one-month peak on Wednesday as expectations of a US interest rate cut knocked the dollar to a record low against the euro, though suspected central bank intervention limited its gains.
The partially convertible rupee ended at 40.4475/4550 per dollar, up from the previous close of 40.56/57, and moving closer to July's nine-year high of 40.20.
Dealers said the rupee met firm resistance from the central bank, which aggressively bought dollars in a bid to stem its rise. Data on Wednesday showed a slower-than expected growth in industrial output, and analysts said the rupee's 9 percent rise this year was taking a toll on exporters.
The market estimates the Reserve Bank of India bought about $400-600 million on Wednesday, taking its dollar purchases over the past two sessions to around $1 billion. Persistent problems in global credit markets and weak US jobs data have led investors to factor in a half-percentage point cut in the federal funds rate.