The Indian rupee recovered from an early low to end almost steady on Wednesday after the central bank supplied dollars to a market bearish on spiralling oil prices and a stronger global dollar.
The rupee closed at 45.8500/8650 per dollar against Tuesday's 45.8600/8700. It bounced off an early low of 45.92.
"There were some intervention sales through state-run banks today, and a software company's inward remittance of around $50 million towards the close," said a trader at a private bank.
"The market is bearish, but the fact that the central bank is supporting the rupee is prompting many to sell above 45.90."
The rupee is under pressure as the country's oil bill bloats and the dollar strengthens globally.
The central bank usually intervenes to contain volatility and correct demand-supply mismatches but some believe it could also be supporting the rupee to contain inflationary pressures.
In the forward market, the US currency continued to gain against the rupee. The annualised premium on the six-month dollar rose to 2.43 percent from 2.28 percent on Tuesday.
Banks are encouraging their importing customers to hedge their forex exposures at least for the short term.
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