By Swati Bhat
MUMBAI (Reuters) - The Indian rupee posted its first quarterly fall in four on the last day of the 2020/21 fiscal year as a broad rally in the dollar finally rubbed off on the local unit.
The rupee still managed to gain 0.5% against the dollar in March compared to massive falls in other emerging market currencies.
The partially convertible rupee ended the fiscal year at 73.1050 per dollar versus its previous close of 73.38. It touched 73.5950 in early trade, its weakest since March 1.
The rupee fell 0.1% against the dollar in the quarter compared to a gain of 1% in the December quarter and its first fall since the March quarter last year.
"Just as INR's artificial relative uptick in mid-March was transient, we think the sharp relative depreciation is more a reflection of reversal of those transient factors than anything structural at play," said Madhavi Arora, lead economist at Emkay Global Financial Services.
The dollar hit a fresh one-year high versus the yen and multi-month peaks with other rivals on Wednesday as investors bet that massive fiscal stimulus and aggressive vaccinations will help the United States lead a global pandemic recovery. [FRX/]
"In all likelihood, INR will start following suit of its EM peers by early April," Arora added.
Traders said dollar selling by corporates and foreign portfolio inflows at year-end following a long weekend also helped the rupee recover from its session lows.
The broader NSE share index, however, fell 1.04% while the BSE index ended 1.25% lower.
Investors were bearish on all Asian currencies for the first time in a year, a recent Reuters poll showed, as U.S. economic outperformance and new virus lockdowns elsewhere muddy the outlook for risk assets.
(Reporting by Swati Bhat; Editing by Kim Coghill)