It opened at 87.14 per dollar and moved towards 86.96 but gave up its gains in the second half of the day, dealers said.
The dollar index hovered around 103.7 levels.
India’s retail inflation, as measured by the Consumer Price Index (CPI), eased to 3.61% in February from 4.26% in January, showed data released by the National Statistics Office (NSO) on Wednesday.
“The CPI inflation came in better than expected and the strength in the rupee shows that markets have started pricing in further and possibly even deeper rate cuts,” said Dilip Parmar, currency research analyst at HDFC Securities.
The currency had risen to 86.94 levels during the day but gave up its gains in the final hours of trading, dealers said. “There was some (dollar) buying in the last hour since the currency broke past the 87/$1 level, and hence the rupee gave up its gains to close slightly weaker,” Parmar said.Flows in the market remained weak due to the approaching long weekend. However, debt inflows were present, traders said. The Indian markets will remain shut on March 14 for the festival of Holi.
