The rupee moved 18 paise higher against the dollar to close at 74.21 on Wednesday. That marked the first rise in the the rupee against the greenback after six consecutive sessions of decline. The mild recovery in the rupee comes on the back of some weakness in the dollar against major currencies overnight and expectation of improvement in liquidity in the system going forward. Despite Wednesday's rise, the rupee is still down around 16 per cent so far this year.
Here are 10 things to know:
1. The rupee advanced to an intraday high of 74.05 against the dollar on fresh selling of the greenback by exporters during the session, before giving up some of those gains by the end of the day.
2. Besides, hopes of the government announcing more measures provided support to the currency.
3. The government is considering tapping citizens abroad to prop up the rupee, news agency Bloomberg reported late on Tuesday. Officials from the finance ministry and the central bank are discussing a plan to raise money from non-resident Indians, the agency said citing people asking not to be named as the information is not public.
4. The Reserve Bank of India said it would buy Rs 12,000 crore worth of bonds via an open market operation on October 11.
5. That is part of the central bank's decision, announced last week, to buy a total of Rs 36,000 crore worth of government bonds under its open market operations (OMOs) this month. The RBI aims to ease liquidity conditions in the market.
6. The rupee is expected to stay near recent record lows over the coming year even as the central bank is forecast to raise rates in December and once more in 2019, according to a poll by news agency Reuters.
7. Analysts expect the pressure in the rupee to continue going forward. Salil Datar of Essel Finance VKC Forex said he sees the rupee at 74.50-74.75 levels against the greenback “unless there is some serious intervention from the Centre”.
8. Sentiment also got a lift after State Bank of India, coming to the rescue of cash-strapped non-banking financial companies, on Tuesday announced its decision to buy their "good assets" to the tune of Rs 45,000 crore. Such a move by the country's largest bank will provide liquidity support to the cash-strapped NBFCs, which have been facing headwinds after a series of loan defaults by IL&FS group firms.
9. The dollar index - which measures the greenback against six major currencies - fell 0.08 per cent overnight, easing from seven-week peaks.
10. The rupee has hit repeated record lows against the dollar this year in its worst run since the financial crisis. It is down over 16 per cent so far this year, tracking a deep selloff in emerging markets driven by a resurgent dollar and the ongoing US-China trade war.