The Indian rupee ended unchanged at 61.79 against the dollar Tuesday on alternate bouts of demand and supply amid surprise steps by the RBI to increase liquidity.
The Reserve Bank of India Monday reduced the marginal standing facility (MSF) rate, at which it lends emergency funds to banks, by 50 basis points to 9 per cent per cent to improve liquidity conditions in the banking system.
Dollar demand from importers matched supply from exporters, resulting in the rupee ending stable.
At the interbank foreign exchange market, the local currency resumed higher at 61.68 a dollar from the previous close of 61.79 and moved in a range of 61.60 to 61.91 before settling at the overnight closing level.
The 30-share benchmark Sensex pared initial gains and closed 88.51 points or 0.44 per cent higher. Overseas funds bought a net Rs 494.13 crore of shares yesterday, according to provisional data with the stock exchanges.
The dollar index was up by 0.07 per cent against a basket of six major global currencies.
"Despite yesterday's announcement regarding cut in the MSF, rupee was not seen gaining today," said Abhishek Goenka, CEO of India Forex Advisors. "The overall international markets were also seen trading flat."