The rupee fell below 80 rupees for the second time in intraday trade on Tuesday but rebounded due to dollar sales by the RBI. The dollar index has also retraced its gains, with the greenback losing ground versus other currencies.
The rupee began higher, but renewed demand for dollars pushed the native currency down around the 80 levels. It closed the day at 79.99, down four pence from the previous closing of 79.95. Stock purchases boosted sentiment as the government largely reversed recent proposals to put a windfall tax on oil.
Internationally, crude oil prices have also dropped by roughly a dollar.
According to dealers, the central bank does not appear to be supporting any certain level but does guarantee that there are no dramatic changes.
According to dealers, the RBI's involvement ensures that there is a consistent supply of currency and that exporters do not hold back and importers do not store dollars in anticipation of more weakness.
The rupee rebounded after breaking through the crucial 80-per-dollar level for the first time on Tuesday, as it reached seven consecutive intra-day record lows for the seventh consecutive session.
The rupee was last trading at 79.9487 versus the US dollar, having ranged between 79.8675 and 80.0600 throughout the day on Tuesday.
The rupee has now breached the 80-dollar level for the first time, setting a new all-time low.
According to PTI, the rupee recovered from an all-time low of 80.05 to settle 6 paise higher provisionally at 79.92 versus the US dollar on Tuesday, mirroring regional peers and a bullish trend in local markets.