The Indian currency today improved by another seven paise to 40.44/45 against the US dollar in late morning deals on the back of sharp recovery in equity markets and expectations of fresh capital inflows after US Federal Reserve interest rate cut last night. In quite trade at the Interbank Foreign Exchange (Forex) market, the local currency opened remarkably higher at 40.36/38 a dollar from yesterday's close of 40.51/52 a dollar.

Dealers attributed rally in the rupee to sharp surge in Asian equity markets. The Indian benchmark Sensex was up by over 632 points in morning trade while most of the Asian indices were up by 2.0 to 3.0 per cent this morning.

Later, the rupee was quoted slightly lower but still up at 40.44/45 in late morning deals.

The US Federal Reserve yesterday slashed the interest rate by 0.75 per cent to boost the sagging economy and both top US investment banks, Goldman Sachs and Lehman Brothers, announced better-than-expected quarterly results which mainly helped to revive the stock markets.

Expectations of fresh foreign fund inflows in equity markets due to US rate cut also helped the rupee surge.

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