The rupee held on to its sharp gains earlier in the day, even as the dollar pared its losses, and crude oil prices rose, but remained below $90 a barrel after a sharp drop in the previous session.
Bloomberg showed that the rupee was at 79.7175 per dollar, compared to its previous close of 79.9037, after opening at 79.6687.
PTI reported that the rupee rebounded by 24 pounds to temporarily close at 79.71 against the US dollar.
In the interbank forex market, the local unit opened at 79.72 per dollar, and saw an intraday high of 79.65 and an intraday low of 79.83, according to PTI.
The rupee opened stronger supported by lower oil prices and the recovery of most Asian currencies against the dollar.
But the local currency pared some of the gains, affected by the demand for dollars from importers and oil companies.
“Importers are taking advantage of the pullback (US$/INR pair) and there is continued demand from oil refineries,” Anil Bhansali, head of treasury at Phoenix Trenchuri Advisors, told Reuters.
Mumbai-based Mecklai Financial advises importers to hedge whenever a net hedge rate (spot + futures) is available below 80. With a spot price close to 79.70, importers can buy futures hedges below 80 through the end of October, according to a Reuters report.