Rupee makes a comeback

The rupee bounced back against the US dollar, as stocks surged across the world in the wake of multiple regulatory actions to revive confidence in financial markets and defuse tension in the global credit markets. On Friday, the Indian currency had the biggest intra-day rally in nearly two months after the US government stepped up efforts to ease the strain in the credit markets and the world's leading central banks continued to boost liquidity in money markets. The rupee rose 1.4% to 45.83 per dollar, its biggest gain since July 23 after the benchmark BSE Sensex had its biggest gain in almost two months. The index rallied by nearly 5.5% to 14,042 while the NSE Nifty jumped 5.1% to 4,245. The rupee touched an intra-day high of 45.76 and a low of 46.41, reflecting the underlying volatility in the foreign exchange markets. Four of the 10 most-active Asian currencies, excluding the yen rose against the dollar. Earlier in the week, the rupee almost fell below the 47 per dollar mark on sustained buying by foreign banks and a sharp drop in the stock market. The rupee dropped 0.3% on the week. Gains in the Indian currency were tempered by speculation that importers, including state-run oil refiners will purchase dollars to pay for crude oil, as the commodity rebounded from a seven-month low.