The Indian rupee recovered by 18 paise to 42.47/48 against the United States dollar, on a steep fall in global crude oil prices below $122 a barrel.

At the Interbank Foreign Exchange (Forex) market, the rupee resumed higher at 42.51/53 and improved to quote at 42.47/48 a dollar.

The rupee got support from a smart recovery in equity markets where the Indian benchmark Sensex was up by nearly 254 points.

Yesterday's review of annual monetary policy this fiscal by the Reserve Bank of India (RBI) pushed the rupee upwards.

The RBI hiked the key short-term lending rate by 0.5 per cent and mandatory cash reserve requirement (CRR) by 0.25 per cent to contain inflation.

However, dealers say that the rise in rupee might cap following month-end dollar demand from oil refiners.