Mumbai, April 21: The rupee pared its earlier gains and closed three paise lower against the US currency at 44.55/56 due to late dollar demand amid capital outflows.
At the Interbank Foreign Exchange (Forex) market, the domestic unit had touched a high of 44.38 a dollar on the back of initial firmness in local stock markets.
Persistent selling of dollars by exporters and banks in view of weakness of the US currency in the overseas market too boosted the rupee sentiment earlier, dealers said.
Late dollar buying by importers, however, put pressure on the rupee in later part of the day. Fag-end weakness in equities too weighed on the rupee, they said. The BSE benchmark Sensex ended up by 11.98 points or 0.07 per cent.
Fresh selling by foreign institutional investors in equities also kept the rupee under pressure.
—Agencies