The dollar index recovered its early losses and was trading up by 0.11 per cent against a basket of six major rivals.
The rupee fell back sharply against the pound sterling at 83.28 from Monday's close of 82.49 and also reacted downwards against the euro to 71.59 from 71.29.
The report further pointed out that the current rupee volatility will be 'less damaging than in 1991, when low reserves and a widening current account deficit prompted India's last balance of payment crisis'.
BSE Metal index has zoomed by over 4% followed by counters like PSU, Capital Goods, Oil & Gas, Auto, Power, Realty and Banks, all gaining by 2-3% each.
On the 30-share index, Maruti was the biggest loser, shedding 3.60 per cent. Other major laggards were Yes Bank, IndusInd Bank, Tata Steel, Hero MotoCorp and NTPC -- ending up to 2.33 per cent lower.
The rupee had closed flat at 54.85 against the US dollar in Tuesday's trade amid RBI keeping key rates unchanged in the mid-quarter policy review.
India's unstable politics and slow pace of reforms add to the downside risks said the bank's note.
Pharma major Sun Pharma remained the worst loser in the Sensex pack for the second day in a row after reports that regulator Sebi may reopen the insider trading case against the company.
The rupee had closed barely steady at 63.75 on Wednesday.
Analysts say that the rupee trajectory, going ahead, will be a function of flows.
Indian rupee is the world's most undervalued currency, says The Economist.
Weak dollar in the overseas market also boosted the rupee value against the dollar, a forex dealer said.
A higher opening in the domestic equity market and the strengthening of euro and yen against the dollar overseas also aided the rupee, dealers said.
A year ago, India's GDP was expected to grow at 8.2 per cent. Instead it is growing at 5.3 per cent.
In New York market, the US dollar pared losses on Wednesday amid reports that cut into optimism that Washington lawmakers are close to a deal to avoid going over the fiscal cliff.
The upward revision in growth forecast for current fiscal comes in the backdrop of GDP expanding 8.2 per cent in April-June quarter, higher than Fitch's expectation of 7.7 per cent.
On Monday, the biggest gainers in the Sensex pack were Sun Pharma, Bajaj Finance, Vedanta, Yes Bank, Tata Motors, HCL Tech, IndusInd Bank and Kotak Bank, HCL Tech, Infosys and Bajaj Auto.
Might earn around Rs 3,720 crore on export of 2 mt of wheat, despite dipping prices in international markets
Our advice to individuals holding foreign currency so far has been that they should convert half of their holdings into the Indian Rupee.
Market expert Shrikant Chouhan, head of Technical Research, Kotak Securities, replied to many such important investment queries during a chat on rediff.com on Tuesday.
The broader NSE Nifty ended at 10,888, a gain of 0.77 per cent or 83 points, after shuttling between 10,900.35 and 10,844.85.
Government needs to rethink its over-dependency on imported petrol, and come up with ways to stabilise the Indian rupee.
Myanmar is a member of the Asian Clearing Union and settlement of current account transactions including trade transactions are done through ACU.
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.
Petrol price may be cut by about Rs 1.60 per litre later this month as appreciation of rupee against the US dollar has helped state firms make profit on the fuel.
CARE Ratings, in a report, said it foresees an increase in the retail prices of petrol and diesel in the coming few days, depending on how the oil markets react in the reduction in supply from the cartel.
The Indian rupee continued to rule firm in the late morning session by improving five paise to 53.11 per dollar on selling of dollars by banks in view of persistent foreign capital inflows.
'The credibility of the messenger here is highly suspect. This is something which the global community is aware of'
In order to facilitate purchase of crude oil from Iran, the Finance Ministry has issued a notification exempting payments made in Indian rupee for such imports from any local tax.
Colorado-based cartoonist Dr Thomas A Kodenkandath, also known as Thommy, has won a prize for his cartoon headlined 'Indian Rupee gets a Symbol' from the Kerala Lalithakala Akademi.
One should appreciate the sagacity and audacity of JRD and Nani Palkhivala in founding TCS on April 1, 1968. At that time there was no Microsoft or Intel, SAP or Accenture, much less Google.
They needed a person who could build and execute their vision: A frontiersman; a problem solver and an institution builder. It was their and India's good fortune that Faqir Chand Kohli more than measured up to their requirements and indeed laid the foundation to take TCS to unimaginable heights and to the giant success that it is today. Shivanand Kanavi salutes the incomparable F C Kohli, who passed into the ages last week.
The central bank also purchased $778 million dollars in May and $650 in June.
The Indian rupee slid to a fresh low of Rs 55.32 against the US dollar in the afternoon trade on Tuesday as foreign funds pulled out from emerging markets avoiding risky assets.
After the presentation of the Union Budget in mid-March, the rupee has been again jittery and anaemic, dropping to an all-time low of 54.9 on May 18, raising serious concerns in both the media and Parliament.
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Demand for the dollar from importers weighed on the local currency.
The RBI has been repeatedly cautioning everyone about the usage of cryptocurrencies, flagging a slew of concerns.
Rima Kallingal talks about the success of her film 22 Female Kottayam
Decrying the hike in diesel prices as "unjustified" action, Tamil Nadu Chief Minister J Jayalalithaa on Tuesday demanded its roll back and withdrawal of powers granted to oil companies to regulate fuel prices.
Heightened volatility makes the debt rollovers difficult.
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