Indian rupee bounces back from record-low close,up 22 paise to 60.88

The rupee today recovered from all-time closing low to end 22 paise higher at 60.88 against the dollar amid fresh selling of the US currency by banks and exporters and inflows of foreign capital into stocks. The rupee resumed higher at 61 per dollar from Friday's close of 61.10 at the Interbank Foreign Exchange Market and moved up to 60.72. However,the early gains were trimmed and the rupee ended at 60.88 per dollar,a gain of 22 paise,or 0.36 per cent,on some demand from banks and importers as the US currency strengthened overseas. The rupee had lost 70 paise,or 1.16 per cent,in the previous two sessions. Today's gain was the most since July 24,when the local currency added 63 paise to close at 59.13. Foreign institutional investors purchased a net Rs 283.79 crore of shares on Friday,as per provisional figures issued by the stock exchanges. The benchmark Sensex gained 18.24 points,or 0.1 per cent,to 19,182.26. The rupee's gains were capped as a survey showed India's private sector activity contracted for the first time in over four years in July. The HSBC India Composite Output Index,which maps services and manufacturing activity,fell to 48.4 in July,down from 50.9 in June,indicating a contraction. "It was a mixed session for the rupee,which started the session on a slightly positive note but ended it on a weaker note," said Abhishek Goenka,founder and CEO of India Forex Advisors. "India's service PMI added to the weakness in rupee as the service activity fell into contraction territory." In the global market,the US dollar edged higher in early trade,paring losses made in the wake of below-consensus job growth. Forward dollar premiums declined on fresh receipts by exporters. The benchmark six-month forward dollar premium payable in January was down at 255-258 paise from the previous close of 259-264 paise. Far-forward contracts maturing in July moved down to 468-471 paise from 470-475 paise. The RBI fixed the reference rate for the dollar at 60.8220 and for the euro at 80.7335. The rupee remained weak against the pound sterling to end at 93.44 from Friday's close of 92.57 and eased further to 80.76 against the euro from 80.70. It fell back against the Japanese yen to 61.84 per 100 yen from 61.22.