Security prices fell in intra-day trades on Monday, but recovered by close. The 12.40 per cent 2013 was quoted Rs 103.82/88 (Rs 103.79/83) at close, but was seen lower at Rs 103.80 levels earlier. The 12.32 per cent 2011 was seen at Rs 103.82-103.88 (104) in later day trades, up from its earlier lows of Rs 103.79-103.81.

The rupee's fall to 43.5850/5950--its lowest this fiscal--and its subsequent rally to 43.4050/41 is its most volatile movement in recent times.

"There was active corporate interest for dollars in early trades. Most expected the Reserve Bank to intervene at 43.54 levels. That never came about, and banks started building uplong-dollar positions," IndusInd Bank's treasury-head Sharukh Wadia said. Others like Kanji Pitamber & Co's Gautam Ashra said: "Both state-run and private-owned corporates were seen bidding for dollars. A few banks were also rolling over their FCNR-B liabilities. It appears as if corporates with unhedged positions rushed to cover after seeing the weakness in the spot-rupee."

However, today's intra-day volatility is a one-off instance and the rupee might well be seen at 43.4250/4350 levels on Tuesday, he added.

Opening the day at 43.47/49 from its weekend close at 43.46/48, the rupee went lower by 9 paise to 43.55/56 by mid-session on good corporate interest for dollars. "There was both corporate and inter-bank demand for dollars. State-run and foreign-owned bank built up long-dollar positions with dollar interest building up," Mecklai Financial Services' senior vice-president KN Dey said.

Later in the day, the rupee rallied all the way to close at 43.40/41 as the State Bank started its dollar sales."State Bank sold dollars right up to 43.40 levels," said Dey. "This," said Kanji Pitamber's Gautam Ashra, "led to other banks unwinding their long-dollar positions." Cash/spot quoted at 1/.25 paise (1.50/1.75 paise), cash/tom at 0.2750/0.6250 paise (1.25/1.50 paise) with tom/spot at 0.3750/0.6250 paise (0.25/0.50 paise).

Meanwhile, in the forwards, premiums quoted higher on Monday in intra-day trades as the spot-rupee weakened to 43.5850/5950 levels. "There was paying pressure in the far forwards. Premiums opened higher, but came lower by close of trades as the rupee rallied," Wadia at IndusInd said. September dollars quoted at 26/27 paise (25/26 paise), October unchanged at 40/42 paise while in the far forwards, January was seen at 96/98 paise (95/96 paise) and February at 111/114 paise (110/111 paise).