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Rupee remains firm

MUMBAI, AUG. 6. Overcoming severe early pressures caused by soaring global oil prices and flaring inflation rates, the rupee ended mildly higher against the U.S. currency today on the back of strong exporter dollar sales and squaring-up of position by banks ahead of the weekend.

In volatile trade at the interbank foreign exchange market, the rupee closed at Rs. 46.36/37 a dollar, a paisa gain from Thursday's finish of 46.37/38 after tumbling to lows of 46.48/51 due to hectic dollar short-covering by banks, following news that inflation soared to 7.51 per cent, dealers said.

The rupee opened distinctly weak at 46.40/42, weighed down by a spurt in global oil prices to all-time highs of $44.77 a barrel. Already reeling under tremendous pressure due to surging global oil prices, which spurred heavy dollar demand from large oil corporates, the rupee succumbed to the inflation news in afternoon trade, as nervous operators scrambled to cover dollar positions and drove it sharply lower to 46.48/51.

However, fresh exporter dollar sales, led to unwinding of long overbought dollar positions by banks in the closing hour that helped the rupee recover most of the losses, a forex dealer said. Inflation shot up to 7.51 per cent, the highest in the last two years, due to soaring prices of vegetables and manufactured products.

— PTI

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