The rupee slipped on Wednesday, shrugging off India's rapid economic growth in the July-September quarter as the dollar bounced overseas on data reaffirming expectations of higher US interest rates.
Traders said a large state-run bank had led the dollar buying, acting possibly for oil importers and other local companies seeking to meet month-end import and debt payments. But losses were curtailed by foreign fund investments in local stocks, dealers said.
The rupee shed 0.08 percent to close at 45.93/94 per dollar, compared to Tuesday's 45.895/905 close. It hit a 13-month low of 46.06 earlier in November.
"There was month-end demand and with the dollar also stronger in the morning, the rupee was under some pressure," a chief dealer at a foreign bank said.
"But then despite stocks languishing, we actually saw some FII inflows instead of outflows, and also long dollar positions being liquidated towards close."
Traders said with month-end dollar demand exhausted, the rupee could inch up on Thursday if the dollar did not make gains against the euro and yen overseas.
Traders said the rupee, which has weakened 5.4 percent in 2005 on growing concerns about a widening trade deficit, had bobbed up due to the robust growth but slipped again following steady dollar purchases by local importers.