The Indian rupee strengthened on Friday from a near-record low, supported by the central bank and underpinned by a late rally in the stock market. Traders have been watching the stock market for direction after foreign funds turned heavy sellers over the past few months, putting pressure on the rupee.
"The unexpected recovery in stocks was the main driving force for the rupee's rise," the chief dealer with a state-run bank said. "I heard some Asian hedge funds were buying stocks today which led to recovery across Asian markets."
The partially convertible rupee ended at 50.04/05 per dollar, 0.3 percent stronger than 50.18/22 at close on Thursday, when it hit a record low of 50.60 during trade. One-month offshore non-deliverable forward contracts were quoting at 50.96/51.11, weaker than the onshore spot rate, indicating a bearish outlook for the local unit.