New Delhi

The rupee rose 4 paise to close at 88.66 against the US dollar on Friday, aided by a rebound in domestic equities towards the closing of market hours and a sweeping mandate for the ruling alliance in the Bihar polls supporting the local unit at lower levels.

However, the strength of the American currency and rising crude oil prices prevented sharper gains in the local unit, forex traders said.

At the interbank foreign exchange market, the rupee opened at 88.70 against the US dollar. During the day, the domestic unit witnessed an intra-day low of 88.75 against the greenback.

The rupee finally settled for the day at 88.66, up 4 paise over its previous close.

On Thursday, the rupee settled eight paise lower at 88.70 against the US dollar.

"The rupee remained in a small range with everyone waiting for the trade deal with the US to happen which has been frustrating for the market players. Since morning, rupee was in a small range... and forward premiums were also in small range but generally on the downside as the liquidity position improves," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.12 per cent higher at 99.27.

Brent crude, the global oil benchmark, was trading 1.59 per cent higher at USD 63.98 per barrel in futures trade.

On the domestic equity market front, Sensex rose 84.11 points to settle at 84,562.78, while Nifty was up 30.90 points to 25,910.05.

Foreign institutional investors sold equities worth Rs 4,968.22 crore on Friday, according to exchange data.

On the domestic macroeconomic front, wholesale price inflation fell to a 27-month low of (-) 1.21 per cent in October, led by a sharp deflation in food items like pulses and vegetables, and lower prices of fuel and manufactured items.

Wholesale Price Index (WPI)-based inflation was 0.13 per cent in September and 2.75 per cent in October last year, government data showed on Friday.

Meanwhile, Moody's Ratings on Thursday projected India's economy to grow at 7 per cent in 2025 and 6.5 per cent in the next year, supported by domestic and export diversification, amid a neutral-to-easy monetary policy stance.

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Moody's, in its Global Macro Outlook, said India's economic growth is supported by robust infrastructure spending and solid consumption, although the private sector remains cautious about business capital spending.