The Indian rupee ended lower on Tuesday after state-run banks aggressively purchased dollars through the day on behalf of the central bank, dealers said.
The rupee closed at 45.6275/6325 per dollar, marginally weaker than Monday's 45.6250/6300 and off a session high of 45.5950.
"State-run banks just kept buying right through the day and set the agenda," a foreign bank dealer said.
"There was little the market could do about it despite dollar inflows being decent."
Traders said they had been surprised by the extent of central bank intervention at a time the dollar is under broad pressure overseas.
"Everyone is quite perplexed by this sustained support for the dollar given that it is at life lows against the euro and struggling at multiyear lows against most other major currencies," a dealer at a state-run bank said.
Forward dollars ended slightly dearer as state-run banks transacted sell-buy swaps in near maturities to inject much-needed dollar liquidity in the cash segment and partly to neutralise the impact of their spot dollar purchases.
The annualised discount on the six-month forward dollar shrank a little to 0.01 percent, from Monday's 0.04 percent.
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