The Indian rupee recovered from early lows and ended marginally higher on Tuesday, helped by foreign direct investments and dollar inflows from exporters, dealers said.
The rupee ended at 45.4000/4050 per dollar, slightly firmer than the previous close of 45.4100/4150 and off 45.4325 hit in early deals.
Most foreign exchange transactions in the Indian currency market are routed through banks in New York, which were closed on Monday for a holiday.
Rupee premiums on the forward dollar edged up as more banks transacted sell-buy swaps amid a growing view that a cash dollar shortage at the month-end was unlikely in January, dealers said.
Forwards have traded at a discount in the past four months due to heavy intervention by the central bank in the spot dollar market and the rollover of receivables by a few banks.
The six-month forward ended at an annualised 0.77 percent, up from the previous close of 0.63 percent. It has risen 31 basis points since the start of the week.
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