Mumbai: After falling below 55-level in early trade, the rupee Monday washed out early losses to close three paise up at 54.86, snapping a two-session string of losses, on late dollar selling by some exporters and custodian banks.
The rupee commenced lower below 55-mark at 55.03 and dropped to a nearly two-month intra-day low of 55.15 on continued dollar demand from importers. It later bounced back to a high of 54.80, before closing marginally up by three paise or 0.05 percent at 54.86.
In previous straight two trading sessions, it had plunged by 103 paise or 1.91 percent.
Dealers attributed late recovery in the rupee value to heavy dollar selling by exporters and some banks at 55-level.
The Indian benchmark S&P Sensex, which was down by 158 points in early stage, recovered to closed down by nearly 41 points or 0.21 percent. FIIs sold up shares worth Rs 30 crore today as per provisional data from bourses.
The dollar index was up by 0.13 percent against a basket of six major currencies.
"Technically speaking if rupee sustains over 55.30 levels on closing basis, we could see further weakness in rupee. The point to be noted, that rupee has depreciated nearly 2 percent in last two days, the pace of depreciation was immense clearly reflecting the overall trend of the pair. The Dollar index is also trading at its 6 months high, putting further pressure on rupee," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
Meanwhile, raising hopes of a sovereign credit upgrade, global rating agency Moody's today applauded Finance Minister P Chidambaram's Budget saying that it pursues realistic fiscal consolidation path and is 'credit positive'.
"The rupee was seen depreciating taking cues from the weaker Euro and the strong Dollar index. The rupee gained at the end of the day on the back of the announcement made by the FM on the reliability of the Budget targets for the growth and twin pillar deficit," Goenka added.
Earlier today, virtually ruling out rollback of 3 percent hike in excise duty on SUVs, Finance Minister P Chidambaram assured India Inc that a clutch of decisions, mainly on indirect taxes, would be announced during the course of debate on Budget and Finance Bill in Parliament.
Meanwhile, the benchmark six-month forward dollar premium payable in August ended at 189-191 paise and far-forward contracts maturing in February finished at 352-354 paise.
The RBI fixed the reference rate for the US dollar at 55.0518 and for euro at 71.6145.
The rupee ended a tad higher against the pound sterling at 82.49 from last weekend's close of 82.50 and also rebounded against the euro to 71.29 from 71.55.
It also recouped against the Japanese yen to 58.70 per 100 yen from previous close of 59.09.
First Published: Monday, March 04, 2013, 18:39