Rupee up 153 paise at 65.54 a dollar as RBI lifts capital controls

The rupee opened stronger on the inter-bank foreign exchange market today rising by hefty 153 paise to 65.54 against the dollar against the previous day's closing of 67.07 a dollar.

The domestic unit opened higher and rose to as much as 65.54 per dollar. At 10.20 am, the partially convertible rupee traded at 66.03 per dollar against Wednesday's close of 67.07.

The Indian unit reversed its declining trend after the new RBI governor, Raghuram Rajan, partially rolled back some of the curbs on foreign exchange outflows imposed in August.

The rupee was up 107 paise at 66.03 against the previous close of 67.10 a dollar at 12.50 pm.

The central bank on Wednesday said an Indian company will be allowed to invest up to 400 per cent of its net worth provided it has raised the funds through external commercial borrowings (ECBs).

Traders said the fresh measures announced by the RBI had helped the rupee settle at 67.07 against the dollar yesterday, up by 56 paise over the previous day's close.

Also, exporters and banks have returned to the forex market with dollar sales after the new RBI governor Raghuram Rajan announced fresh measures to curb the rupee's slide.

Traders said the dollar's weakness against other major currencies overseas also supported market sentiment.

On the inter-bank call money market, the overnight rate at which banks borrow money from each other to meet their short-term fund requirements, opened higher at 10.30 per cent from its previous close of 10.25 per cent.

The benchmark 7.16 per cent 2023 government bonds opened at Rs93 against the previous close of Rs91.95, softening yields to 8.21 per cent from 8.38 per cent.