Mumbai: The rupee rose 21 paise to close at 85.73 against the US dollar on Tuesday on the back of a decline in global crude oil prices and a weaker greenback.
Foreign fund inflows and firm domestic equity markets further boosted the rupee, according to forex traders.
At the interbank foreign exchange, the rupee opened at 85.75 against the US dollar and traded in a narrow range of 85.64-85.80 before settling at 85.73, up 21 paise from the previous close.
The local unit logged a steep fall of 54 paise to settle at 85.94 against the US dollar on Monday.
“The rupee was range bound with chances of a US-India (pact) being concluded today (Tuesday), keeping rupee on an upward trend. The closing was slightly higher but a conclusive mini-trade deal could allow rupee to gain once again towards 85.30/40 levels,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
The local unit is expected to be in the range of 85.30-86.00 on Wednesday with expectations of some positive developments tonight, he said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.18 per cent to 97.30.