Re bounces back by 32 p to 59.35 vs USD after 2-days of losses

The rupee snapped two days of losses and appreciated by 32 paise today to close at 59.35 against the dollar as the US currency weakened overseas and traders wound up positions at the end of the week.

The rupee was also helped by fresh dollar sales by exporters and some banks and around Rs 250 crore capital inflows in stocks.

At the Interbank Foreign Exchange Market, the rupee resumed lower at 59.72 a dollar from the previous close of 59.67 and declined to a low of 59.88. It bounced back on dollar selling by exporters and some banks, touching a high of 59.30 before settling at 59.35, a rise of 0.54%.

The rupee was also supported by comments from Prime Minister Manmohan Singh, who indicated the RBI's measures to curb exchange rate volatility by tightening liquidity may be reversed.

'These steps...Are designed to contain speculative pressure on currency. Once these short-term pressures have been contained, as I expect they will be, the Reserve Bank can even consider reversing these pressures,' Singh said at the annual meeting of Assocham.

The benchmark S&P BSE Sensex gained 21 points, or 0.11%. FIIs sold shares worth Rs 178.30 crore yesterday as per provisional data with the stock exchanges.

The dollar index was down 0.17%.

'Dollar demand from companies and importers kept the rupee under pressure,' said Pramit Brahmbhatt, CEO, Alpari Financial Services (India). 'Today being the last day of the week, most of the traders prefer to square up their open positions, which helped the rupee to eventually appreciate.