Recovering from its early losses, the rupee closed marginally higher by 5 paise at 50.12 against the U.S. currency on fag-end selling of dollars by banks and exporters after the greenback weakened in overseas markets.
Moving in line with the domestic equity market, the rupee resumed lower at 50.35/36 per dollar on the Interbank Foreign Exchange as against its previous close of 50.17/18 per dollar. It moved down further to 50.42 per dollar before ending at 50.12/13 per dollar.
The domestic currency hovered in a range between Rs 49.96 and Rs 50.42 per dollar during the day.
Initially, the rupee declined to 50.42 per dollar in view of sustained dollar demand from banks and importers, a dealer said.
However, it recovered afterwards due to fag-end selling of dollars by banks and exporters due to lower dollar in overseas market.
The U.S. dollar slipped versus most major rivals in the global market, with the euro finding renewed support on hopes Italian lawmakers will move quickly to approve new budget measures while ushering in a new coalition government.
The rupee premium for the forward dollar continued to remain weak on sustained receipts by exporters.
The benchmark six-month forward dollar premium payable in April settled down at 100-102 paise from previous close of 101-103 paise and far-forward contracts maturing in October also finished lower at 159-161 paise from 163-165 paise previously.
The RBI fixed the reference rate for the U.S. dollar at Rs. 50.2795 and for the euro at Rs. 68.4460.
The rupee recovered against the pound sterling to end at Rs. 79.84/86 from Rs. 80.09/11 previously and also moved up to Rs. 68.39/41 from Rs. 68.41/43 per euro.
However, it declined further against the Japanese yen to 64.77/64.79 per 100 yen from the last close of Rs. 64.60/62.
