The rupee strengthened past the psychological 71-to-the-dollar mark, climbing to as much as 70.9175, the highest since September 3 and compared to its previous close of 71.46 on Tuesday. It was trading at 70.93 to the dollar at 1033 GMT or or 4:03 pm. The foreign exchange market was closed on Wednesday for a holiday. The country imports more than two-third of its oil requirement and a fall in crude prices eases dollar demand from importers.
The Reserve Bank of India was not seen intervening in the spot forex market to contain the sharp rise in the rupee, two dealers said.
"Traders are unwinding long dollar positions," said a foreign bank dealer.
Oil prices fell after US crude inventories swelled to their highest since December, stoking concerns about a global glut but OPEC talk of an output reduction limited the losses.
Benchmark Brent was down 67 cents at $62.82 a barrel by 0904 GMT or 2:34 om IST, after dropping as much as $1 earlier in the session.
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