The Indian rupee rose on Tuesday, but lacked conviction despite a second day of solid gains in the stock market as dollar demand from private banks and oil importers weighed. The partially convertible rupee ended at 42.885/895 per dollar, 0.13 percent stronger than its close of 42.945/955 on Monday.
"The stock markets had a bit of impact, but not much. It was a mixed interest, some foreign banks were seen selling rupees since morning and private banks were seen buying dollars," said Paresh Nayar, chief dealer at Development Credit Bank. "Overall, it appears that at 42.95 there is the fear of central bank intervention, and the dollar-rupee is seen having support at the 42.75 level on the downside," he added.
Traders said the central bank had sold dollars last month to support the rupee when it fell to a 13-month low of 43.21, and appeared to want to keep it stronger than 43 per dollar.
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