KARACHI, Aug 24: The rupee on Tuesday gained three paisa more against the US dollar in the inter-bank market primarily due to a temporary liquidity shortage in the money market.

Senior bankers said the rupee closed at 58.71 up three paisa from Monday close of 58.74 that itself was two paisa higher than the 58.72 a dollar at the weekend. Thus the local currency has gained five paisa in two sessions.

Bankers said a tight money market with an estimated shortage of Rs3-4 billion and overnight call rate ranging between 4.5-6 per cent made the rupee stronger.

These bankers also said that importers demand for dollars was fading and exporters had started selling export proceeds a bit faster than in the recent past.

This is the third week during which the rupee is showing signs of recovery. In the last two weeks it had gained 12 paisa against the US dollar. But since July 1 it has lost 59 paisa or one per cent of its value.