KARACHI, Aug 23: The rupee gained two paisa against the US dollar in the inter-bank market on Monday due to low demand of dollars from importers. Bankers said the rupee closed at 58.74, up two paisa from the weekend close of 58.76 a US dollar.

They said that the liquidity crunch created in the wake of higher-than-targeted sale of treasury bills by the State Bank last week also eased off to some extent. The bankers said no bank had to borrow overnight funds from the SBP, adding that overnight call rates in the inter-bank market also fell to 4.5 per cent during the day before closing around six per cent.

During the last two weeks, the rupee had recovered 12 paisa against the US dollar. But since the start of this fiscal year, it has lost 62 paisa or less than 1.1 per cent of its value, falling from 58.12 to 58.74 per dollar.