Mumbai: Suspected intervention by the apex bank at the lower level of 61.74 -five month low- (Intra-day), the Indian rupee managed to land in positive terrain, up by a mere three paise to end the week at 61.15 against the Greenback.
Foreign funds inflow in local equities and fresh dollar selling by exporters also helped the rupee recovery.
A firm dollar overseas, on weekly basis, limited the rupee rise.
On first two days of the week, the rupee saw appreciation in line with strong domestic equities but on Wednesday it plunged by 65 paise in its biggest single-day drop in over six months hit by spike in dollar demand and negatives cues from local stocks.
Continued strength in US economy lifted the American dollar after data on Tuesday showed US services sector activity hit an 8-1/2 year high last month and June factory orders surged. This affected the rupee sentiment, say dealers.
At the Interbank Foreign Exchange (Forex) market, the local currency commenced strong at 60.90 a dollar from last weekend's close of 61.18 and improved further to a high of 60.69 on the back of strong equities and dollar selling by exporters and some banks.
However, it later touched a low of 61.74 -five-month low- on rising global worries before bouncing back on suspected intrusion by the Reserve Bank of India (RBI) and USD demand from importers on fears of rise in global oil prices after US President Barack Obama authorised targeted air strikes in Northern Iraq amid concerns that the Ukraine crisis could escalate.
The rupee later finished the week at 61.15, showing a rise of three paise or 0.05 percent. Last week, it had tumbled by 108 paise or 1.80 percent.
Tensions in Libya and resumption of conflict between Israel and Gaza later weighed on the dollar and ultimately helped the rupee rise.
Adding to the global worries, Russian President Vladimir Putin went on retaliatory measures by banning food imports from Western countries. Russia faces sanctions imposed by the US and European countries.
Meanwhile, the RBI Tuesday maintained its key rate as it is but slashed statutory liquidity ratio (SLR) by 0.5 percent to release about Rs 40,000 crore into the financial system.
It also reduced the ceiling of banks total holdings of SLR securities under the held to maturity to 24 percent from 24.5 percent of net demand and time liabilities.
Pramit Brahmbhatt, Veracity Group CEO, said, "Rupee closed the week slightly higher. During the week Rupee touched 5 month low. Corporate dollar demand and weak local equities hammered the Rupee. But suspected intervention by the RBI helped the rupee to land in the green.
"Global sell off was seen as growing tension in Ukraine created negative sentiments in the market and forced investors to stay away from equity markets. The trading range for the Spot rupee for Monday is expected to be within 60.80 to 61.50."
In the forward market, premium remained weak on sustained receipts by exporters.
The benchmark six-month forward dollar premium payable in January closed lower at 243-245 paise from 249.5-251.5 paise last week and far-forward contracts maturing in July 2015 at 488-490 paise from 490-492 paise.
The RBI fixed the reference rate for the USD at 61.5575 and the euro at 82.4125 from previous weekend's close of 60.8510 and 81.4615.
The rupee recovered against the pound Sterling to 102.79 from 102.97 preceding weekend and also recouped to 81.88 per euro from 81.93. It, however, dropped further to 59.97 per 100 Japanese yen from 59.43 last weekend.
