MUMBAI, March 19 (Reuters) - The Indian rupee strengthened on Wednesday, touching a near two-month high, supported by dollar sales from foreign banks and seasonal inflows even as its regional peers dipped ahead of the U.S. Federal Reserve's policy decision.
The rupee ended the session at 86.4425 against the U.S. dollar, slightly higher than Tuesday's close at 86.57. Earlier in the day, the currency hit 86.4250, a peak since January 27.
While the rupee has been on a winning run this week, traders have also pointed to likely passive absorption of dollar inflows by the central bank, probably to replenish the forex reserves expended on supporting the rupee over the past few months.
Inflows related to inter-company borrowings and repatriation of corporate profits are usual in March, the last month of the financial year. Such inflows have aided the rupee over recent trading sessions.
The inflows also likely helped the rupee weather a pickup in dollar strength on Wednesday. The greenback was up about 0.3% against major peers, while Asian currencies were mostly lower with the Indonesian rupiah down 0.3% and leading losses.
Reporting by Jaspreet Kalra; Editing by Eileen Soreng
Source: Reuters