The Indian rupee inched higher on Wednesday, helped by inflows into the stock market and dollar selling by exporters, but traders said central bank intervention curbed gains. The partially convertible rupee ended at 39.980/39.985 on Wednesday, 0.33 percent above Monday's close of 40.1050/1150.
The currency market was shut on Tuesday due to end-of-fiscal-year settlements. "There was a good supply of dollars via exporter selling and stock market inflows, but the central bank was buying lots of dollars today keeping the rupee in a range," said Agam Gupta, head of currency trading at Standard Chartered Bank.
He expects the rupee to trade in a 39.75-40.10 band for the rest of the week. Analysts expect that authorities will let the rupee to rise more in the coming months to help curb inflation, which hit a 14-month high in mid-March, although, as shown on Wednesday, the central bank will moderate the pace of any gain.
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