Rupee belies expectations, gains 10 paise at 53.98 on $ sales

At Interbank Foreign Exchange (Forex) market, the local currency resumed slightly weak at 54.10 a dollar from previous close of 54.08.

It touched a fresh 5-month low of 54.19 on early dollar demand from importers and disappointment over RBI's monetary policy were it refrained from cutting rates but as expected lowered cash reserve ratio of banks.

FIIs, which sold stocks worth nearly Rs 200 crore today, also did not lend any support to the sagging rupee sentiment.

But heavy dollar selling in sync weakness in US currency overseas, the rupee staged a smart recovery to touch a high of 53.85, before concluding at 53.98 -- a rise of 10 paise.

Bankers said there were no reports of RBI intervention today to arrest the rupee's initial fall. The dollar index, a gauge of six major global rivals, was down by nearly 0.25 per cent as the initial impact of a massive storm in the US looked to have been less severe than feared, said dealers.

"After the disappointment from RBI, rupee was seen drifting towards its 5-week low against dollar. The recovery was mainly on account of dollar index coming below 80.00 levels and Euro recovering above USD 1.29 levels," said Abhishek Goenka, Founder and CEO, India Forex Advisors.

Meanwhile, the Indian stock market benchmark Sensex today closed lower by 204.97 points or 1.10 per cent. The New York crude oil was quoting below USD 86 a barrel in Europe today. (MORE)