The Indian rupee slipped off the previous session's near-four-year closing high on Tuesday as the central bank mopped up foreign trade and investment inflows, traders said.
The rupee closed at 43.7250/7450 per dollar, compared with Monday's 43.6750/6850, which was the highest close in 47 months.
Traders said were it not for intervention, the Indian unit would have appreciated despite the dollar's global surge.
"The impact (of the dollar's rise) is still not being felt locally because investment inflows continue to remain strong," said a trader at a state-run bank.
Foreign investors are buying Indian shares in anticipation of robust earnings announcements for the January-March quarter later this month.
Indian companies are expected to report strong profit growth with the economy, Asia's third largest, estimated to have expanded by more than eight percent in the year to March 2004.
With economic growth expected to remain strong and lure more investment inflows in the year ahead, traders and analysts are betting on further gains in the rupee.
Moreover, they are waiting to see if the dollar's recent rising trend will be sustained.
The dollar is trading near four-month highs against the euro on the back of strong US jobs and non-manufacturing sector data released on Friday and Monday, respectively.
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