Rupee posts biggest single-day gain in nearly a year

The rupee rose 2.1 percent on Friday, its biggest jump in nearly a year, as equities posted strong gains for a second session and the RBI was suspected to have sold dollars heavily late in the session.
However, the partially convertible rupee registered its second weekly loss, as investors fretted over fears of how the country will fund its large current account deficit as the US Federal Reserve is expected to begin tapering its monetary stimulus.
The rupee hit a series of record lows in the week, falling as much as 65.56 to a dollar on Thursday, making its Asia's worst performer so far in 2013.
Policymakers stepped in late Thursday to calm markets.
Indian Finance Minister Palaniappan Chidambaram said that the rupee was "undervalued" and the current account deficit could be smaller than the previously estimated $70 billion.
Reserve Bank of India governor Duvvuri Subbarao also chimed in, saying that the central bank would continue with its cash tightening steps until the rupee stabilises.
"We are looking for a pullback in the USD/INR to 63.50-63.60 in the next two days (sessions) due to genuine exhaustion and positive US equities," said Dhirem Sarin, chief technical strategist, Asia-Pacific, at Barclays in Singapore.