Rupee recovers after hitting 3-week low vs USD

After falling to three-week low of 54.07 on sluggish industrial output and rising inflation, the rupee on Tuesday wiped out losses to end stable at 53.85, snapping a four-day losing trend, on late dollar sales and FII inflows.

On Interbank Foreign Exchange (Forex) market, the rupee commenced lower at 53.95 a dollar from the previous close of 53.85. It dropped to a three-week intra-day low of 54.07 on continued dollar demand from importers and initial hesitancy in local stock markets.

Dollar demand surged after government data showed growth in industrial output contracted by 0.6 per cent in December while retail inflation, on the other hand, remained in double digits at 10.79 per cent in January.

However, late dollar selling by exporters and rise in stocks helped the rupee to bounce back to a high of 53.84, before ending at its overnight closing level of 53.85.

In last four trading sessions, the rupee had dipped by 71 paise or 1.34 per cent against the US dollar.