The rupee recovered 20 paise to close at over three-week high of 60.47 against the US dollar in the previous session on Friday following strong local equities and capital inflows.
The rupee had gained 24 paise to close at nearly one-week high of 60.95 against the dollar yesterday following selling of the US currency by exporters and some banks, amid sustained heavy capital inflows.
Under the scheme coming into effect from April 1, 2018, a donor could purchase bonds from authorised banks against cheques or digital payments. These would be redeemed only in the designated account of a registered political party.
Whether the rupee can regain that momentum will largely depend on foreign investors, who have been net buyers of more than $2 billion in shares over the previous 20 sessions and of $2.3 billion in bonds in March.
But gains in the rupee were kept in check as domestic shares faltered, ending a five-session gain.
The rupee had depreciated by 39 paise, logging its biggest daily loss in nearly two months, to end at 61.34 on Thursday on fears of capital outflows from emerging markets after Federal Reserve signalled a sooner-than-expected hike in US benchmark interest rates.
In the offshore non-deliverable forwards, the one-month contract was at 61.56/66, while the three-month contract was at 62.16/26.
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The worst performing Asian currency of the year so far hit a new life low of 61.80 rupees per dollar on Tuesday, breezing past a previous low of 61.21 hit on July 8. Central bank intervention helped the rupee recover, but by Wednesday it was sliding once again, to stand around 61.41 by 1.30 p.m.
Financial numbers can sometimes paint a rosy picture because of changes in the accounting policy or a one-time income.
In New York, the US currency fell against the Australian dollar and British pound on Monday as investors continued to weigh the potential weather drag on recent economic data, and whether or not it could sway monetary policy.
The partially convertible rupee closed at 61.5350/5450 per dollar compared to 61.54/55 on Wednesday.
On Monday, the rupee recovered from four-month low by rising 25 paise in its biggest gain in three weeks to end at 60.93 against the Greenback as shares soared ahead of the RBI's bi-monthly policy meet and exporters offloaded dollars.
The rupee had gained nine paise to close at nearly one- month high of 61.84 against the dollar in yesterday's trade after the government said in the interim Budget that fiscal deficit this financial year will be capped below target.
In the latest large opinion poll, the opposition Bharatiya Janata Party and its allies were forecast to win a narrow majority in the 543-seat lower house of parliament, compared with previous surveys predicting that they would fall short.
A fall in blue-chips such as Larsen and Toubro on anxiety ahead of the quarterly earnings season and inflation data hurt local shares.
For now, the rupee is likely to remain dependant on global factors. The dollar held on to broad gains on Thursday after Fed chairman Bernanke said the central bank still expected to start scaling back its bond purchase programme later this year, but left open the option of altering that plan.
The rupee had eased by five paise to close at 60.50 against the dollar in the previous session on Thursday.
The domestic currency had lost 63 paise to close at over four-month low of 61.18 against the dollar in Friday's trade on weakness in global stock markets and a strong US currency overseas.
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In New York, the US dollar gained against most rivals on last Friday, as a week of data reassured investors that December's dismal employment report wasn't indicative of a broader shift in the economy.
The rupee had ended 13 paise higher at 60.92 against the greenback in Wednesday's trade following sustained dollar selling by exporters.
In New York, the US dollar swung higher against many of its rivals on Wednesday.
This is the first time in the RBI's history that a governor is leaving without willing to renew his contract
The rupee had dipped by a massive 67 paise to an all-time closing low of 61.10 against the dollar on Friday.
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The Reserve Bank of India late on Wednesday unveiled rules to restrict how much its citizens and companies can invest abroad and announced additional curbs on gold imports.
The partially convertible rupee closed at 61.31/32 per dollar, unchanged from its Tuesday close.
Foreign funds sold Indian shares worth 446.9 million rupees ($7.4 million) on Wednesday, provisional exchange data showed, marking the third consecutive session of outflows.
The markets regulator made it easier for banks to acquire control in listed companies.
Global currency market sentiment is likely to be driven by the US deficit and debt ceiling negotiations, with markets likely to turn more risk averse closer to October 17, the date by which the US Congress must approve raising the country's borrowing limit.
In New York market, the dollar fell against the Japanese yen yesterday, taking cues from declines in US stocks.
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The rupee resumed slightly lower at 62.05 per dollar as against the last weekend's level of 62.04 at the Interbank Foreign Exchange market. It recovered to 61.88 per dollar before quoting 61.93 at 1045 hours.
The Gujarat International Finance Tech-City, or Gift City, is expected to be spread over 886 acres and will have a special economic zone on 261 acres.
Forex dealers said besides the dollar's gains against other currencies overseas, increased demand from importers for the American unit put pressure on the rupee but a higher opening in the domestic equity market capped losses.
'Initially, Gift City was just another real estate project, but all that changed with Modi moving to New Delhi,' notes Tamal Bandyopadhyay.
The Reserve Bank of India (RBI) will have to take far more pro-active steps to rebuild forex reserves, because if the status quo remains, rupee could touch 75 per US dollar by the end of 2014, Bank of America Merrill Lynch said in a report.
In the global markets, the US dollar traded lower in early trade after former US Treasury Secretary Larry Summers withdrew himself from the race to be the next Federal Reserve chairman.
In New York, the dollar edged down against the yen for the first time in three sessions as investors weighed economic data and remarks from outgoing Federal Reserve Chairman Ben Bernanke.
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Traders say the outlook for the rupee has improved on the back of a sharp narrowing in the current account deficit after government and central bank emergency measures such as curbing gold imports.
Besides, a higher opening in the domestic equity market and strengthening of the euro against the dollar overseas supported the local currency, forex dealers said.
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The partially convertible rupee closed at 63.37/38 per dollar compared with 62.83/84 on Monday. The unit dropped 0.85 per cent on the day, its biggest single-day fall in two weeks.
The previous bout of Fed withdrawal fears had threatened to spark a crisis of confidence in India -- sending the rupee to a record low of 68.85 in late August and leading to steep falls in bonds and stocks.
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