Re recovers from record lows; up 60 paise

Bouncing back from its record lows, the rupee on Wednesday gained 60 paise to close at 57.79 against the dollar as rating agency Fitch revised India's credit outlook to stable and government officials soothed market sentiment with assurance of taking steps to curb the currency's fall.

Also, heavy dollar selling by some big corporates and US dollar weakening against the euro overseas also aided the rupee, forex dealers said.

The local unit resumed higher at 58.20 against the dollar from Tuesday's all-time closing low of of 58.39 but fell back to the day's low of 58.38 at the Interbank Foreign Exchange market.

However, it kept improving from there to the day's high of 57.73 before concluding at 57.79, a rise of 60 paise, or 1.03 per cent.

In the last five trading sessions, it had tanked by 195 paise, or 3.45 per cent against the dollar.

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"The rupee recovered mainly on soothing comments from Finance Ministry officials and Planning Commission Deputy Chairman Montek Singh Ahluwalia on government taking steps to curb its fall and revision on rating upgrade by Fitch.

"Also, there were reports of some major corporates heavily selling dollars and euro strengthening, which aided rupee's gains," said Srinivasa Raghavan, EVP (Treasury), Dhanlaxmi Bank.

Asked about any intervention from RBI to stop rupee's fall, he replied in the negative, adding that rupee is likely to stabilise to 57 level by this month end.

Taking note of the government's efforts to contain fiscal deficit, Fitch Ratings on Wednesday revised India's Outlook to Stable from Negative and affirmed 'BBB-' rating.

Finance Minister P Chidambaram on Wednesday held meeting with top officials and is understood to have discussed steps to check its slide against the US dollar, according to sources.

Also, Planning Commission's Ahluwalia said the government has been taking steps to deal with the economic situation and hoped that forex market will stabilise.