Rupee surrenders initial gains vs dollar, steady at 54.2

The Indian rupee surrendered its earlier gains and ruled steady at 54.26 against the American currency in the late morning trade on mild dollar demand from banks despite weakness of dollar in overseas market.

The rupee resumed lower at 54.29 per dollar as against the last closing level of 54.26 per dollar at the Interbank Foreign Exchange (Forex) market.

But firmed up immediately to 54.22 per dollar on selling of dollars by banks in view of persistent foreign capital inflows into equity market.     However, it failed to maintain earlier gains and was quoted steady at 54.26 per dollar at 1040 hrs.     

In New York market, the US dollar declined yesterday as Federal Reserve policy makers began a two-day meeting likely to result in more asset purchases that are seen as weakening the country's currency.

Meanwhile, the Indian benchmark Sensex resumed higher at 19,432.54 and moved up further to 19,478.79, but declined immediately to 19,381.07 before quoting at 19,406.07 at 1040 hrs, showing a marginal gain of 18.93 points or 0.10%.