Rupee falls by nine paise to 60.22 vs USD on importer demand

After a day's respite, the rupee today declined by nine paise to 60.22 in volatile trade on fresh dollar demand from importers even as RBI possibly intervened to arrest the slide in the local currency.

The drop was also limited by fresh capital inflows and firm local stocks.

The rupee resumed at 60.06 a dollar from the previous close of 60.13 on the Interbank Foreign Exchange (Forex) market and reached a high of 60.00 as local stocks climbed and exporters sold dollars.

The rupee then dropped to a low of 60.59 amid renewed dollar demand from importers, a strong dollar overseas and late profit booking in stocks. The rupee regained some ground to close at 60.22, a decline of 0.15%.

'Possibly, there was intervention from the Reserve Bank around the 60.58/59 level, which helped the rupee to recover,' said Hemal Doshi, a currency strategist at Geojit Comtrade.

The benchmark S&P BSE Sensex, which added 229 points at mid-session, ended with a gain of 85 points, or 0.44%.

The dollar index, consisting of six major global rivals, was up by 0.20% after the European Central Bank and the Bank of England each indicated there were no plans to reduce stimulus immediately.

'The dollar rallied across the board yesterday after the dovish comments made by both the European Central Bank President Mario Draghi and new Bank of England Governor Mark Carney,' said Pramit Brahmbhatt, CEO, Alpari Financial Services (India). 'It extended its strength today also against other major currencies, forcing the rupee to depreciate.'

On a weekly basis, the rupee extended its fall for the ninth straight time -- one of its longest losing streaks.