The rupee jumped to 53.45 against the dollar after the government slashed tax on overseas borrowing by local companies to 5 per cent from 20 per cent earlier.
Finance Minister P. Chidambaram announced today that the reduced tax will apply to funds borrowed between July 2012 and June 2015. The withholding tax liability on Indian companies would also be reduced to 5 per cent, he said.
The rupee had opened stronger at 54.20 against the dollar from a weaker close of 54.38 on Thursday.
The government has said it continues to stay firm on its measures on diesel price hike and FDI in multi brand retail and aviation. Denying any rollback, Chidambaram on Thursday had assured more reform measures to be announced.
