The Indian rupee strengthened to its highest level in nearly a week on Tuesday as some custodian banks sold dollars, probably for investing in the increased foreign institutional debt limits, dealers said. The partially convertible rupee closed at 45.1625/1725 per dollar, after hitting 45.16, its strongest since January 5 and 0.6 percent above its 45.45/46 close on Monday when it had fallen as low as 45.5175, its weakest since December 20.
One-month offshore non-deliverable forward contracts were quoted at 45.42, weaker than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange closed at 45.3150, 45.32 and 45.3150 respectively, with the total traded volume on the three exchanges at about $6.3 billion.
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