Rupee closes higher on dollar selling by exporters

Continuing its winning streak for the second straight session, the rupee on Wednesday gained another 3 paise to 62.82 against the US dollar on persistent selling of the American currency by banks and exporters amid fresh foreign capital inflows into the equity market.

The rupee resumed flat at 62.85 per dollar at the at the Interbank Foreign Exchange (Forex) market and hovered in a range of 62.7150 and 63.02 before concluding at 62.82 per dollar, showing a gain of 3 paise of 0.05 per cent from its last close.

The rupee has gained 9 paise, or 0.14 per cent, in the last two days.

"We saw some residual inflows today also related to stake sale of Daiichi in Sun Pharma in early morning trades. But later, there was panic in the market after an RBI advisor said that the rupee should weaken to 64 to 65 level, which took the currency to 63 level. Later, we saw exporters selling in the market," said a dealer with a state-owned bank.

Banks and exporters preferred to reduce their dollar position in view of heavy foreign capital inflows into equity market, a forex dealer said.

Foreign Portfolio Investors (FPIs) bought shares worth a net $2,599.77 million, as per Sebi's record on Tuesday.

In Asian market, the dollar was trading lower against the yen on Wednesday, getting a boost as Japans main stock market trimmed its earlier gains, action that limited selling of the Japanese currency.

In New York market on Tuesday, the dollar ended mixed against major currencies, with the euro pivoting to modest gains against the greenback after euro zone finance ministers moved away from fixing a deadline for Greece to come up with fiscal reforms.