The rupee retreated further from record lows on Thursday as traders cut long dollar positions following the Reserve Bank of India's measures to ease rules on deposits by non-resident Indians and those on overseas borrowing rules for firms.
The RBI on Wednesday raised the interest rate ceiling on deposits held by overseas Indians in both the rupee and foreign currencies, citing market conditions.
The RBI also eased overseas borrowing rules for local corporates by raising the ceiling for the interest that the firms can pay for borrowing abroad.
Traders said the moves could attract inflows and soften the blow on the rupee.
At 9:25 am, the partially convertible rupee was at 52.16/17 per dollar, stronger than Wednesday's close of 52.36/37. It had touched an all-time low of 52.73 on Tuesday.
Market talk of the central bank starting a direct access window for oil firms to borrow dollars could also ease the pressure on the rupee, which has slumped more than 14.5% in 2011 and is the worst performing currency in Asia.
The euro wallowed at seven-week troughs against the dollar in Asia trade, having suffered a steep fall after a "disastrous" German bond sale fuelled fears the region's debt crisis was beginning to threaten even Europe's biggest economy. The euro's moves limited sharp gains in the local unit.
