Rupee breaches 42-mark against US dollar

The Indian rupee surged strongly for the second consecutive day after the government won the trust vote and breached 42-level in more than two months amid rising stock markets and easing global oil prices.

At the Interbank Foreign Exchange (forex) market, the local currency resumed firm at 41.92/93 a dollar from its last close of 42.09/10 a dollar and later appreciated further to 41.84/85 a dollar in late morning deals.

Forex dealers said the rupee continued to draw support from expectations of capital inflows after the government has indicated that it would now focus on greater economic reforms, including relaxing FDI limit in sectors like insurance.

The rupee also benefited from consistent surge in stock prices resulting in fairly good inflows.

Foreign Institutional Investors bought shares worth about $300 million on July 23, as per provisional data.

The Indian benchmark Sensex was up 155 points at 1015 hrs on Thursday.