Rupee closes 5 paise weaker against dollar at 59.74

Mumbai: The Indian rupee reversed its gains and ended marginally down against the US currency on Thursday, which the dealers attributed to dollar demand from importers.

The suspected intervention from the Reserve Bank of India (RBI) to prevent further gains of the local unit too weighed on the currency, dealers said. The RBI typically intervenes in the currency market to check excess volatility.

Rupee ended at 59.74 per dollar, down 0.08%. It touched a high and a low of 59.54 and 59.84 per dollar, respectively. India’s equity benchmark S&P BSE Sensex ended at 25,823.75 points, down 0.07%.

“The rupee lost gains as importers including oil companies purchased dollars,” said Ankur Jhaveri, co-head of currency and rates in Mumbai at brokerage Edelweiss Financial Services Ltd.

State-run lenders probably bought the greenback on behalf of the RBI after the local currency touched the day’s high of 59.54 per dollar, the strongest level since 13 June, four Mumbai-based traders said, asking not to be identified as the information isn’t public.

The yield on India’s 10-year benchmark bond ended at 8.66%, compared with its Wednesday’s close of 8.66%. Bond yields and prices move in opposite directions.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.043, up 0.11% from its the previous close of 79.956.

Since the beginning of this year, the rupee has gained 3.44% against the dollar, while foreign institutional investors have bought $10.29 billion from local equity markets.

Bloomberg contributed to this story.