The rupee gained its most in two weeks on Wednesday, largely aided by inflows related to a debt auction, with volumes remaining low as most state-run banks were thinly staffed due to a strike.
Dealers said the gain was due to foreign funds buying rupees to participate in a debt-limit sale for foreigners, which they need to subscribe to for buying local debt. India will auction about $12.3 billion of limits, including $10 billion of new government and corporate bond limits on Friday.
"Trading volumes were thin, which increases volatility. I did not see much participation by refiners. The next trigger will be the budget," said Naveen Raghuvanshi, associate vice-president at Development Credit Bank in Mumbai.
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