The Indian rupee today gained 38 paise to close at an over one-week high of 46.66/67 against the US dollar, following firm equities as well as month-end demand for the US currency.

At the Interbank Foreign Exchange (Forex) market, moving in tune with the stock markets, the rupee rise to a high of 46.65 before concluding the day at 46.66/67 a dollar, a net rise of 0.81 per cent. The Bombay Stock Exchange benchmark Sensex was up by over 129 points in intra-day but lost some of the gains to end higher nearly 58 points or 0.32 per cent.

There was some month-end dollar demand from importers, which also supported the rupee rise, forex dealers said. The dollar was weak against some of its major rivals today. It was at a nearly two-month low against the Euro. Foreign Institutional Investors (FIIs) have injected over USD 2.4 billion so far in equities, mainly giving a push to the rupee.

Meanwhile, the Reserve Bank of India -- in its quarterly monetary policy review today -- hiked its short-term lending and borrowing rates by 0.25 basis points to 5.75 per cent and 0.50 basis points to 4.50 per cent respectively, a move aimed at taming double-digit inflation. Global crude oil continued to rule below USD 79 a barrel in London today.

The rupee premium for the forward dollar ended higher due to fresh paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in December finished higher at 90-92 paise from 86-1/2-88 paise on Monday and far-forward maturing in June also flared up to 168-1/2-170-1/2 paise from 158-160 paise previously. The Reserve Bank of India fixed the reference rate for the dollar at Rs 46.76 and the euro at Rs 60.80.

In cross-currency trade, the domestic unit rose against the pound sterling and the Japanese yen. However, it hardly changed against the euro. The rupee rebounded against the pound sterling to end at Rs 72.50/52 per pound from Monday's close of Rs 72.85/87 and also recouped against the yen to Rs 53.38/40 per 100 yen from Rs 54.05/07 previously. However, it closed at Rs 60.79/81 against the euro from its previous close of Rs 60.78/80.