The Indian rupee fought shy of rising past a nine-year high of 39.85 per dollar on Friday despite investors' appetite for the higher yielding currency as suspected central bank intervention and demand from oil importers capped gains.
The rupee has appreciated nearly 1.5 percent in the last three sessions after sharp cuts in US rates on Tuesday revived strong foreign fund interest in the record-breaking stock market.
The partially convertible rupee ended at 39.90/91 per dollar, after hovering near 39.85 for almost the entire day - its highest since May 1998. On Thursday, it ended at 39.89/90. "The central bank was intervening and some oil buying was there, too," a senior dealer with a private sector bank said. "Anyway, it was too sharp a fall (for the dollar) and so the market was a bit wary," he said. Dealers estimated that the central bank and oil importers put together would have bought a total of $500 million.