The Indian rupee softened by 3 paise to close at Rs 52.98/99 against the US dollar today after two days of gains, in line with a minor fall in local equities.
Mild dollar demand from importers amid dollar firmness of in overseas markets -- with the American currency being quoted at nearly a 16-month high against the euro -- also weighed on the rupee fortunes.
However, increased capital inflows amid some dollar-selling by exporters on hopes of RBI intervention restricted the rupee's fall.
At the Interbank Foreign Exchange, the local unit resumed lower at Rs 53.04/05 per dollar, as against yesterday's close of Rs 52.95/52.96 per dollar, and fell immediately to a low of Rs 53.10 per dollar on initial weakness in the stock market and dollar demand from importers.
A smart recovery in local equities later in the trading session and some dollar-selling by exporters helped the rupee rebound to a high of Rs 52.62. However, late weakness in local stocks pulled it down again and it settled slightly lower at Rs 52.98/99 per dollar.
The BSE benchmark Sensex closed 25.56 points, or 0.16%, lower today after gaining over 97 points at mid-session.
The dollar index, a gauge of six major currrencies, was up by nearly 0.6%, while crude for New York delivery were trading above $102 a barrel in the European market today.
Alpari Financial Services (India) CEO Pramit Brahmbhatt said, "During the day, the Indian rupee made an intra-day high of Rs 52.61, but in the second half of the trading session, the rupee reacted to negative local equities and gave away the intra-day gains. The euro traded at 15-month low against the dollar as concerns over the euro zone's deepening debt crisis."
