RBI partially relaxes overseas investment curbs, intervenes to support rupee

The Reserve Bank of India on Wednesday partially relaxed some of the restrictions imposed last month on capital outflows from residents.

MUMBAI: The rupee recovered sharply on Wednesday as the Reserve Bank of India (RBI) aggressively sold dollars to prevent the currency from falling to a record low amid volatility in global markets over the US push for limited US strikes on Syria.

Traders also cited hopes that Raghuram Rajan, who takes over at the RBI on Wednesday, will bring a new approach to the central bank's defence of the rupee, which has so far relied on a risky strategy to drain cash and raise short-term interest rates.

The central bank was seen selling dollars consistently when the rupee would approach the record low of 68.86 hit on August 28.