Higher interest rates in the US do not necessarily coincide with capital outflows.
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The rupee gained 8 paise to close at over two-week high of 61.23 against the US dollar in the previous session.
Dollar gained against major currencies overseas.
Foreign investors are betting top dollar on the country as growth is likely to recover at a time when other emerging markets are battling macroeconomic adjustments.
Bank credit growth, still sluggish, could see a rise if the Reserve Bank of India decides to cut interest rates, believes Ashima Goyal.
Ongoing trade-war rhetoric between the US and China added some nervousness on the trading front coupled with extremely bullish dollar sentiment overseas.
In a recent article, Rajan has ridiculed critics of the exchange rate policy.
IMF attributes the slower growth rate to supply-side bottlenecks.
It won't be an easy ride for the markets, reckon experts, considering the multiple state elections in 2018 and general elections next year.
The Budget has to provide for capex on roads, railways, defence and other infrastructure sectors.
The majority in the markets believe that a September lift-off is likely.
Faced with sluggish economic growth and dwindling exports, China on Wednesday devalued its currency for the second consecutive day.
RBI is expected to cut policy rates by 50 basis points by 2016.
Nifty ends above 8,400; TCS, HDFC surge 2%, Bajaj Auto dips 2%.
Month end dollar demand from oil importers has forced rupee to trade weak.
The interim dividend will help Narendra Modi-led government partly bridge the deficit its budget had developed after the announcement of a Rs 75,000 crore a year cash dole scheme for small farmers.
These investors have pumped in about Rs 6,900 crore (Rs 69 billion) in the seven trading sessions after the Federal Open Market Commission meet.
Spread investments in equities, bonds, gold and cash to tackle volatility advise Nitin Singh, MD and head, and Vinay Joseph, director, investment strategy, Standard Chartered Wealth Management, India.
The broader NSE Nifty too fell below the 10,100 level by dropping 100.10 points to end at 10,094.25
China's devaluation creates new risk in global financial markets and could prolong the West's slowdown.
The rupee has depreciated by about 25 per cent in the past three months, from close to Rs 83 in mid-May, while it was even higher at about Rs 80 against the British Pound in March.
The financial and commodity markets will continue to roil, as China's growth moderates and readjustments are made.
Commercial papers, certificates of deposit also dry up
Risk sentiment is likely to be favourable if oil prices stay benign, global growth sentiment remains robust and the dollar index does not break out, says B Prasanna.
He endorsed transparency and financial stability in addition to issues related to inclusive growth and development, write Puran Singh and Nupur Pavan Bang.
Here are the key decisions announced by the Reserve Bank of India on Thursday.
The first major devaluation of the rupee happened in 1966 when it was pegged against the US dollar at Rs 4.75/$
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The rupee on Friday touched an all-time low of 62.03 to a dollar, spooking the equities market and dragging the Sensex down to 18,621.39 in the afternoon.
Indian economy was growing faster than the global average and all other major economies: FM
T N C Rajagopalan on the new year and new worries.
Indian economy is doing well and the performance of domestic stock markets is not as bad as that of other nations.
Investment bankers handling the IPO had said marquee global investors made big-ticket applications.
It is high time to manoeuvre the rupee more effectively and predictably, even as it has to be recognised that such tweaking of the rupee needs to be accompanied by reforms to the real sector and factor markets.
Asia's falling stocks have triggered an exodus of funds from the region.
Since mid-July, the RBI has taken steps to tighten cash conditions, which have failed to support the rupee but sent bond yields surging, posing a fresh threat to the already cooling economy.
'In their over-enthusiasm to clean up the system, both the banks and the regulator should not forget that the key to the insolvency law is revival of companies -- recovery of bank dues is an offshoot of that,' points out Tamal Bandyopadhyay.
Foreign exchange reserves of the oil producers have increased by $1.1 trillion over the past decade.
RBI Governor Raghuram Rajan is regarded as credible by global financiers.
Finance Minister P Chidambaram on Monday said the currency will find its level as steps being taken by the government to contain fiscal and current account deficits will improve investor sentiments.
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