The Indian rupee rose on Wednesday as domestic shares recovered from a five-day slump, though concerns about recent heavy foreign outflows and dollar demand from oil importers kept gains in the local currency in check. "The cues are mixed. Headwinds are from the lack of confidence in macro fundamentals and risk of FIIs pull-out from the equity market," said Moses Harding, head of asset-liability management at IndusInd Bank.
The partially convertible rupee closed at 54.52/53 per dollar, marginally stronger compared with its Tuesday's close of 54.58/59. It traded in a 54.40-54.5650 band in the session. Dollar/rupee forward premiums continue to remain high, though it came off near 14-year highs hit on Tuesday.
In the offshore non-deliverable forwards, the one-month contract was at 54.82 while the three month was at 55.45. In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at about 54.65, with a total traded volume of $3.6 billion.