The Rupee recovered initial losses and was quoted higher by 10 paise to 54.75 per dollar on fresh selling of the American currency by banks and exporters.

The surge was facilitated by persistent foreign capital inflows coupled with weakness of dollar overseas.

The Indian rupee resumed lower at 54.90 per dollar as against the last closing level of 54.85 at the Interbank Foreign Exchange Market on some demand of the US currency

from banks.

However, it recovered immediately to 54.73 before quoting 54.75 at 1040 hrs on fresh selling of dollars from banks and exporters.

It hovered in a range of 54.73 and 54.93 per dollar during the morning deals. Foreign institutional investors bought shares worth a net Rs 922.37 crore (Rs 9.22 billion) on Tuesday, as per provisional data from the stock exchanges.

In New York market, the dollar weakened on Tuesday with rising expectations for a deal to avert the fiscal cliff boosting risk appetite and robbing the US currency of its safe-haven appeal.