Mumbai, Feb 27: The Rupee today climbed sharply by about 19 paise against the US Dollar to close at 39.78/79 from its previous close of 39.96/97 on strong inflows in the forex market and weaker dollar in the global market.
After resuming the day on a firm note following strong inflows in the Indian equity market in early trade, the rupee moved in wide range band of 39.71 and 39.84 per dollar, before closing firm in late trade. Dealers anticipated a spurt in foreign buying of equities and other assets. The prospect of more rate cuts by the US Federal Reserve knocked the dollar lower in the global market, dealers said.
''The dollar is under renewed pressure across the world, which is reason for the Rupee gaining strength against the US currency,'' said a dealer with a foreign bank.
Last week, the Indian currency hit a five month low at 40.25 per dollar. India's benchmark share index was up more than 300 points in mid-morning today, spurring hopes of a wave of investments from foreign funds, dealers added.
Meanwhile, the six month premium was quoted lower at 0.24 (0.82) per cent and annualised premium closed at 0.45 (0.80) per cent and the Reserve Bank of India today fixed the reference rate for the US dollar at Rs 39.73, down by 18 paise from previous rate of Rs 39.91.
The Indian unit ended weaker at 59.72 (59.32) against the Euro. Rupee closed weaker at 78.77/78 (78.70) per unit against the Pound Sterling. It ended at 37.30/31 (36.95) per hundred units against the Japanese Yen.