KARACHI, Nov 2: The rupee on Tuesday recovered 31 paisa against the US dollar in the inter-bank market as demand for dollars remained sluggish.

Senior bankers said the rupee closed at 60.57 a dollar, up from 60.88 on Monday on thin demand for dollars as importers stayed away from heavy buying and exporters sold big amounts of export proceeds.

This was the second recovery the rupee made in a row. On Monday also, it had gained 48 paisa against the greenback after the State Bank started paying for oil import bills and tightened rules to check the outflows of foreign exchange. It also changed the cut-off time for inter-bank dealings in foreign exchange, thereby making it difficult for the importers to make panic forward buying of dollars.

Senior bankers said the rupee recovery of 31 paisa or o.5 per cent value on Tuesday was significant in the sense that it came about despite big genuine dollar buying by some corporates from a large local bank.

The rupee that lost 5.5 per cent value against the dollar in July-October has clawed back 1.3 per cent value within just two days. This has reduced the total loss it has suffered against the dollar so far during this fiscal year to 4.2 per cent.