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Market Eye
| Rupee recovers from fall to 5-year low | 01/10/2008 06:00:00 | e Indian rupee recovered from an early drop to five-year lows to end
stronger on Wednesday, lifted from its trough by central bank
intervention, share
market gains and large dollar sales by foreign banks.
The partially convertible rupee ended at 46.62/63 per dollar, 0.7 per cent stronger than 46.95/96 on Monday. The market was closed on Tuesday for half-yearly closing of accounts.
"There was heavy dollar selling by foreign banks today and it also looks like there have been some inflows from foreign institutional investors," said the chief dealer of a state-run bank.
Dealers said the central bank sold a small amount of dollars to help prop up the rupee when it slumped to a five-year low of 47.2350 in early trade.
The main share index rose 1.5 percent on Wednesday, raising hopes of some foreign inflows after heavy selling September.
Foreign funds have sold a net $9.3 bn so far in 2008, after buying a record $17.4 bn last year. India's trade deficit rose to a record $13.4 bn in August from the previous month's $10.8 bn.
"The trade deficit data did have some impact, but the flows today made up for it. But this is a short-term phenomenon I think rupee will be back on track for further weakness next week," the chief dealer said. | Market
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