The Indian rupee erased early losses to close marginally higher on Wednesday, helped by foreign fund inflows and dollar sales by exporters. Dealers said dollar selling by some state-run banks after the rupee hit the day's low of 46.90 per dollar prompted exporters to unwind long dollar positions, outstripping dollar demand from oil companies.
The partially convertible rupee ended at 46.79/80 compared with Tuesday's close of 46.8150/8250. It hit a three-year low of 47.04 last week. "There was good all-round (dollar) selling because it was clear nationalised banks were holding on to the 46.90 level," a dealer with a foreign bank said. However, it was not clear whether the state-run banks were selling on behalf of the central bank.
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