The Indian rupee scrambled off a two-week low in late trade on Thursday but still ended down on the day as dollar buying by state-run banks, probably for the central bank, kept it under pressure, traders said.
Dealers said state-run banks had been buying dollars throughout the session, absorbing foreign funds flowing into Indian stocks.
"It could only be for the central bank," one trader said. Another trader at an Indian bank said foreign institutional investment inflows had been heavy. "The dollar would have weakened slightly but because of the central bank buying through public sector banks it has held," he said.
The rupee ended at 44.5450/5500 per dollar, down from 44.5150/5200 at Wednesday's close. It eased briefly to 44.5725 in early trade, its lowest since March 9, according to Reuters data.
Traders said the rupee had ticked lower when the chief of India's ruling Congress party Sonia Gandhi said she was resigning as a member of parliament and a key advisory body after charges she violated the constitution by holding both posts.
The central bank intervenes through state-run banks to smooth rupee volatility and keep exports competitive and dealers said they expected the rupee to remain under pressure through the end of the week, with oil importers also likely to buy dollars ahead of the month end.
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