The Indian rupee rose on Tuesday after the central bank left key rates steady in its policy review, surprising some dealers who had bet on a cut, and as a rally in shares lifted expectations of capital inflows. The partially convertible rupee ended at 48.94/95 per dollar, off an intraday peak of 48.76, its highest in more than a week, but still about 0.7 percent stronger than Friday's close of 49.27/29. The currency market was closed on Monday for a national holiday. "Some banks sold the rupee ahead of the policy review expecting a rate cut. However, they bought back the rupee when the policy left rates unchanged," a dealer with a state-run bank said. "Steady rates keep rupee investments attractive, as the rate differentials with other currencies remain," he added. At its policy review the central bank left its short-term rates and banks' cash reserve requirements unchanged as it waited to gauge the impact of its aggressive easing since mid-October to stem a sharp economic downturn.

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