Mumbai (PTI) The Indian rupee on Friday recovered by 32 paise to close at near two-week high of 42.46/47 against the greenback on lack of dollar demand and liberalisation of overseas borrowing norms.

Relaxation of overseas borrowing norms by the government which made it easier for local companies to raise external commercial borrowings (ECBs) mainly pushed the rupee upwards, dealers said.

It also increased the limits to 70 per cent on foreign investment in government and corporate bonds.

Dollar selling by exporters at higher levels and rise in equity markets also helped the rupee recovery.

In active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened sharply higher at 42.49/53 a dollar from yesterday's close of 42.78/79.

It later moved in a range of 42.44 and 42.6150 before concluding the day at 42.46/47.

Global crude oil prices fell near USD 126 a barrel from record peak of above USD 135 a barrel last week and this led to a mild demand for dollar from oil refiners.

Strong GDP growth rate of 9 per cent for 2007-08 also boosted the rupee sentiment, expecting more capital inflows in near future.

According to Finance Minister, the growth was quite satisfactory in a year that saw turbulence in money market and corrective steps would be taken to address the slowdown in manufacturing sector.

Firm Asian equity markets also pushed the rupee upwards. The benchmark Sensex rose by over 99 points on Friday.