Rupee ends flats at 54.01, recoups early losses

The rupee on Tuesday recouped initial losses on fag-end dollar selling and nearly $190 million of capital inflows to close flat at 54.01 in choppy trade.

At the Interbank Foreign Exchange (Forex) market, the rupee resumed lower at 54.18 a dollar from previous close of 54.01.

It dropped further to a low of 54.37 on dollar demand from importers, mainly oil refiners, and some hesitancy in local stock market.

A firm dollar overseas also weighed on the rupee in initial stages, forex dealers said.

The sentiment turned in favour of the rupee with late dollar selling by exporters amid continued heavy capital inflows, they added.

The rupee bounced back to day's high of 53.96, before settling at its overnight closing level of 54.01. foreign institutional investors, which have pumped $1.48 billion in previous nine trading days since September 6, pumped in around Rs 1,049 crore (approx. $190 million) on Tuesday as per provisional data on stock exchanges.

In past two days, the rupee had risen by 142 paise or 2.56 per cent.

"The rupee was seen trading

range bound with immense volatility.

"The sudden gain against the dollar could to attributed to heavy dollar selling in the local market.

"The Euro was seen drifting lower while dollar index recovered slightly," said Abhishek Goenka, Founder & CEO, India Forex Advisors.

Meanwhile, the Consumer Price Index rose to double digits at 10.03 per cent in August from 9.86 per cent in July on soaring vegetable prices.

The premium for the forward dollar continued to rule weak on sustained receipts for exporters.

The benchmark six-month forward dollar premium payable in February dropped to 147-149 paise from overnight close of 155-157 paise.

The premium for far-forward contracts maturing in August also dipped to 292-294 paise from 304-306 paise.

The RBI has fixed the reference rate for the US dollar at 54.2570 and for euro at 71.0335.

The rupee fell back against the pound sterling to 87.77 from Monday's close of 87.63 while it remained firm against the euro to end at 70.56 from 70.80.

It also improved further against the Japanese Yen to 68.72 per 100 yen from previous close of 68.89.

The Forex and money markets will remain closed on Wednesday, September 9, for Ganesh Chaturthi.