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Updated: June 25, 2013 18:36 IST

Rupee recovers by two paise to end at 59.66 on firm stocks

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Erasing its initial losses, rupee on Tuesday closed two paise higher at 59.66 against the dollar on some strength in local equities and selling of the US currency by exporters.

A weak dollar overseas also helped the rupee to land in positive terrain at the end while FII outflows of about Rs 1,285 crore capped the rise, forex traders said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed better at 59.64 a dollar from overnight close of 59.68, also its all-time closing low.

The rupee moved in a range of 59.45 and 59.79 before settling the day at 59.66, showing a rise of two paise.

Treasury managers said talks of RBI trying to defend the rupee whenever it approaches 60-levels helped the local currency today.

Yesterday, it had fallen by 41 paise or 0.69 per cent.

The Indian benchmark S&P BSE Sensex today closed up by 88.26 points in choppy trade.

The dollar index was down by 0.15 per cent against its major global rivals.

Globally, it was a mixed session for the Asian markets with some currencies trying to rally early in the session on hopes that a PBOC new conference would allay investor fears of a liquidity crunch in the Chinese markets.

The correction in the dollar rally could accelerate if the US data disappoints the market, said forex experts.

In order to arrest rupee depreciation, Reserve Bank has a capacity to sell up to USD 30 billion from the forex reserves, foreign brokerage Bank of America Merill Lynch has said.

The rupee last week hit its all-time low of 59.97/98 against the dollar (intra-day).

“We expect the rupee to appreciate from the current lows to about 56 by March-end as capital inflows resume and current account deficit softens this fiscal,” Crisil said in a report.

The agency said the current capital flight from the country is a short-term phenomenon, largely an impact of possible tapering of economic stimulus by the US.

It also noted that the government is pledging a slew of policy reforms to shore up investor sentiment, which would attract capital inflows.

Possible government measures include measures to boost inflows/stem INR losses, non-resident Indian (NRI) bond issuance and lower net overnight open position limits (NOOPL) for banks, have also helped the rupee stay somewhat stable.

Meanwhile, premium for forward dollar closed slightly lower on fresh receipts by exporters.

Benchmark six-month forward dollar premium payable in November softened to 152-1/2-154 paise from Monday’s close of 153-155 paise. Far-forward contracts maturing in May also declined to 313-315 paise from 315-1/2-317-1/2 paise.

The RBI fixed the reference rate for the US dollar at 59.7030 and for the euro at 78.3826.

Rupee remained weak against the pound sterling to 92.29 from overnight close of 91.70 and also moved down further against the Japanese yen to 61.28 per 100 yen from 60.91.

It, however, fell back against the euro to 78.34 from previous close of 78.23

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