The Indian rupee eased on Wednesday on ebbing global appetite for risky assets and month-end dollar purchases by oil companies, though losses were limited by exporters buying rupees on the dip, dealers said.
The rupee ended at 40.9725/9825 per dollar, slipping from Tuesday's 40.9025/9125. It tested 41 several times during the session, but never conclusively broke the level. The rupee has been in a broad 40.50-41.25 range since early May.
"Exporters would unload dollars every time the rupee hit 41, and that's what kept the us within range today," said the chief dealer with a foreign bank.
The rupee took cues from other high-yielding Asian currencies that extended losses as investors pared riskier positions amid persistent concerns about the US subprime mortgage market.
The rupee is widely considered a beneficiary of the carry trade, where investors borrow low-yielding currencies to fund investments in high-yielding assets. Foreigners have been keen to invest in India's fast-growing economy in recent years. The rupee hit a nine-year high of 40.28 in May, before central bank intervention knocked it off its peak.