Mumbai: Fag end recovery on likely intervention by RBI through state-owned banks amid record-breaking local equities helped the rupee to recover from its 9-month intra-day low of 62.25 logged on Thursday, still closing low by four paise at 61.76 against the Greenback.
Capital inflows also aided the rupee recovery while firm dollar overseas weighed on the market.
In initial lacklustre trade, the rupee resumed higher but immediately fell back and remained in negative zone for three days on dollar demand from importers, rise in dollar overseas and weakness in domestic stocks.
Fall in the crude oil prices prompted oil companies to speed up their Greenback purchases which also hurt the rupee sentiments.
The dollar hit a new seven-year high against the yen and held near an over one-year peak versus sterling, impacting negatively on the rupee.
At the Interbank Foreign Exchange (Forex) market, the local currency resumed strong at 61.63 a dollar, which also happens to be the week's high, from last weekend's close of 61.72.
Later, it met with strong resistance and dropped to a nine-month low of 62.25 - a level not seen since February 20, 2014 when it had recorded an intra-trade low of 62.45.
However, possible dollar selling by the Reserve Bank through state-run banks improved the rupee sentiment and it recovered to close the week at 61.76, still showing a fall of four paise, or 0.06 percent.
In straight four weeks, it has tumbled by 93 paise, or 1.51 percent.
Smart recovery in local equities on the last two days also boosted the rupee sentiment.
Forex experts said investors added favourable bets ahead of US Federal Reserve minutes that could highlight policy difference with its peers as hopes are high that Fed minutes will sound relatively more hawkish.
The benchmark S&P BSE Sensex closed the week up by 287.97 points, or 1.03 percent, while FPIs/FIIs bought shares worth USD 95.70 million on first four days of the week, as per Sebi data.
Veracity Group CEO Pramit Brahmbhatt said, "The week rupee traded sideways but managed to close near its last weekend's closing level. The rupee is expected to appreciate in coming days, tracking gains in local equities though the strong dollar has dented its upside movement, forcing it to trade over seven month low.
Also, last week we saw some profit-booking from FIIs which further hammered the rupee."
"But on the last trading day, the rupee tried to recover due to RBI intervention through state-owned banks and closed at 61.76, with the help of strong local equities which touched new all-time high. The trading range for the Spot USD/INR pair is expected to be within 61.40-62.20," he added.
In the forward market, premium dollar reacted downwards on fresh receiving by exporters.
The benchmark six-month forward dollar premium payable in April dipped to 205.5-207.5 from last weekend's level of 215-217 paise and far-forward contracts maturing in October 2015 also tumbled to 428.5-430.5 paise from 443-445 paise.
The RBI fixed the reference rate for the US dollar at 61.8505 and the euro at 77.6224 from preceding weekend's level of 61.6475 and 76.6957, respectively.
The rupee remained firm against the pound sterling to end at 96.73 from 96.65 last weekend and also improved further to 52.37 per 100 Japanese yen from 53.01.
It, however, declined further to 76.72 per euro from 76.82 last weekend.
