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Rupee recovers from record low to close at 46.89/$

The rupee was sharply higher against the US dollar at close, after suffering early losses. Foreign fund inflows and heavy dollar selling by banks saw the rupee recovering smartly, dealers said.

The rupee closed at 46.86/89 against the dollar, off a low of 47.13, and compared with 47.02 at yesterday's close.

Intra-day report

The rupee opened weaker on Tuesday, continuing its fall in recent sessions, and was dealt at a new intra-day record low of 47.10 a dollar before recovering on dollar sales by a European bank, dealers said.

It was quoted at 47.03/05 per dollar at 11:25 (IST) after it steadied from the weak open. The rupee had ended Monday at a record low of 47.00/02.

Dealers said the rupee was gradually drifting to lower levels, correcting for a near three per cent overvaluation on a trade-weighted basis following the slide in Asian currencies in past months.

The fall was triggered last week by dollar purchases by an offshore fund, and its over one per cent fall in a week has been tempered by light dollar sales by state-run banks, presumably acting on behalf of the central bank.

Dealers said the rupee has lost about 13 paise a day in the last three sessions and could do the same on Tuesday.

But exporters had placed orders to sell receivables at higher dollar levels on Monday and the absence of heavy dollar demand from importers or foreign funds could break the slide.

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