RBI bought $2.73 bn in Dec ember

RBI bought $2.73 billion in intervention in December, taking its dollar purchases in 2007 to $74.9 billion as it tried to temper the pace of rupee's rise, its monthly bulletin showed on Wednesday.

The Indian currency climbed more than 12 percent against the dollar last year, a gain second only to the Philippine peso among Asian currencies, ending 2007 at 39.42 per dollar.

Foreign portfolio flows of $17.4 billion into the stock market and about $2.3 billion into debt in 2007 were key drivers of the rupees gains last year. Intervention in December was substantially lower than the $7.83 billion in November, when the rupee had peaked at 39.16 per dollar, its strongest is nearly a decade.

Traders said the central bank's dollar purchases so far in 2008 have slowed as risk-averse foreign funds pulled money out of the stock market amid falls in global markets. India's currency reserves jumped $98 billion in 2007 to a record of $275.6 billion on December 28.