Snapping its two-day losing streak against the American currency, the rupee recovered by 11 paise on Wednesday to close at 66.56 on fag-end selling of dollars by banks and exporters on the back of lower greenback overseas and good foreign capital inflows.
Foreign Portfolio Investors and Foreign Institutional Investors bought shares worth a net Rs 328.59 crore on Tuesday as per the provisional data issued by stock exchanges.
The rupee resumed lower at 66.79 per dollar as against Tuesday’s closing level of 66.67 at the Interbank Foreign Exchange (Forex) Market and dropped further to 66.84 on heavy dollar demand on concerns that future equity inflows into India would be hit in the aftermath of amendments to the bilateral India-Mauritius tax treaty.
However, it washed out initial losses on the back of partial recovery in the equity market to close at 66.56 per dollar, showing a gain of 11 paise or 0.16%.
The domestic currency had lost of 13 paise or 0.20% in previous two days.
The domestic currency hovered in a range of 66.56 per dollar and 66.84 per dollar during the day.
The dollar was sharply lower against the yen during Asian trade today hurt by profit-taking after the greenback’s recent strength.
The US currency tumbled to as low as yen 108.60 in the late morning trade in Tokyo, before stabilising at 108.68 yen.
Meanwhile, the RBI fixed the reference rate for the dollar at 66.6958 and euro at 75.9665.
In cross-currency trades, the rupee recovered against the pound sterling to finish at 96.09 from 96.36 on Tuesday.
However, it declined further against the euro to 75.87 from 75.84.
The domestic currency also fell against the yen to 61.19 per 100 yens from 61.13.