The rupee posted its best finish in a month on Thursday as it rode higher against the beleaguered dollar on strong capital inflows and dealers said it would have gained more but for renewed central bank intervention. The rupee ended at 43.5850/5950 per dollar, 0.13 percent stronger than Wednesday's 43.6450/6500 close. It last closed higher at 43.50/51 on February 7.
"We continue to see very good foreign fund inflows and once again, once the rupee was dealt at 43.54, the state-run banks came in for the central bank and started buying," a dealer at a state-run bank said.
"They must be keeping an eye on the euro and the REER (real effective exchange rate) and as long as the rupee is not overvalued by more than 3 percent they let it go a bit."
The central bank has largely limited the rupee's gains since it hit a five-year peak of 43.30 in early February, to ensure export competitiveness against a backdrop of swelling foreign capital inflows.
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