Traders said the rupee was also hit after Reserve Bank of India Governor Raghuram Rajan was quoted by a newspaper as saying the rupee was "too strong" at 55 to the dollar. His comments come after he had warned on Wednesday that a gain in the rupee to 45 or 50 per dollar could hit export.
The RBI has been buying dollars in the recent session to shore up its reserves and prevent excessive appreciation in the rupee.Analysts said the comments may have spurred importers to step in to buy dollars, reinforcing expectations the RBI will continue to intervene should the rupee continue to gain.
There was very good demand from oilers and other importers. The RBI governor's comments irked importers who bought today, but largely the rupee will remain rangebound unit in a 59.60 to 60.80 range this week.
The rupee closed at 60.165/175 per dollar, compared with its previous close of 59.90/91 close, after falling to as much as 60.2850 intraday, its weakest against the dollar since March 28.The reversal comes after the rupee had risen to as much as 59.5950 on Wednesday - its strongest since July 30.
In the offshore non-deliverable forwards, the one-month contract was at 60.61, while the three-month was at 61.30.