The rupee on Wednesday settled at one-year low of 46.16/17 against the U.S. currency, down by 5 paise over last close, as sustained dollar demand from importers and some banks erased its early gains.
However, the third straight day of fall in rupee was checked to some extent by a strong rally in local equities amid capital inflows, dealers said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit opened higher at 46.05/06 a dollar from last close of 46.11/12 and immediately touched a high of 45.98 in line with smart rise in local stocks.
However, it was not able to maintain the surge concluded the day at 46.16/17. Last time, it had ended at 46.35/36 a dollar on September 15, 2010.
Dealers attributed the fall in rupee to late dollar demand from importers and some banks on expectations of a decline in dollar in overseas markets.