The Indian rupee recovered on Tuesday from the previous session's six-month low, bolstered by a late afternoon rise in the local stock market as well as sales of dollars by exporters. Traders were also eyeing the outcome of the US Federal Reserve's meeting later on Tuesday, when it is widely expected to slash interest rates by up to 100 basis points.
The partially convertible rupee ended at 40.51/52 per dollar, 0.5 percent stronger than Monday's close of 40.72/73, a session where it dropped to its lowest since September. "We saw the (currency) market... moving along with the stock market," said a senior trader with a private bank. "There were also exporters in the market."
The rupee has swayed with the flow of capital into the stock market over the past year. It has depreciated more than 3 percent against the dollar so far this year, after climbing more than 12 percent in 2007.