The rupee pared its initial gains to close 13 paise lower at 73.81 against the US dollar on Wednesday, tracking recovery in dollar index and emergence of selling in domestic equities. At the interbank forex market, the domestic unit witnessed a highly volatile trading session. It opened at 73.45, pared the gains and finally closed at 73.81 against the greenback, registering a decline of 13 paise over its previous close of 73.68.
During the session, the local unit saw an intra-day high of 73.42 and a low of 73.82 against the American currency.
“RBI seems to have intervened aggressively in the forex market through futures. The recovery in the dollar index and profit booking in domestic equities also weighed on the rupee,” Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities, said. The dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.07 per cent at 91.37. Analysts, meanwhile, said that investor focus will be on the Monetary Policy Committee’s three-day interest rate-setting meeting that started Wednesday, with the decision due on Friday.