Rupee recovers from early lows, up 12 paise vs $

The Indian rupee gained 12 paise after a weak opening against the US currency in late morning trade today on expected central bank intervention to contain further slide in the domestic unit.

At the Interbank Foreign Exchange (forex) market, the rupee resumed weaker at 51.83/85 a dollar from its last close of 51.77/78. But it recovered smartly to 51.65/67 a dollar in late morning deals.

Dealers said the rupee bounced back from its early lows on anticipation of the central bank's intervention in favour of the domestic currency to prevent any further fall amid sliding stock markets.

The domestic currency also drew support from a fall in dollar against a basket of major currencies in overseas markets.

Dealers said sustained FII pull out from domestic stock markets leading to capital outflows remained the principal cause of concern in the exchange market.

Meanwhile, inflation fell to a six-and-a-half-year low of 3.03 per cent a day after the Reserve Bank of India cut the repo and the reverse repo rates by 50 basis points each.