Indian rupee edges down as oil refiners buy dollars

Tue Nov 20, 2012 5:08pm IST

Related Topics

* Rupee ends at 55.0950/1050 vs 55.06/07 on Fri

* Traders cite continued dollar bids from oil firms

* Break of 55.25 can push rupee down to 56-dealer

By Swati Bhat

MUMBAI, Nov 20 (Reuters) - The Indian rupee closed slightly weaker on Tuesday, ending above 55 to the dollar for a third consecutive session, hurt by weakness in domestic shares and by demand for the greenback from oil companies.

Traders said they will closely monitor the winter session of parliament due to start on Thursday, which comes amid worries about the government's ability to contain the fiscal deficit at 5.3 percent for the year ending in March.

Confidence about the government's resolve in shoring up its finances could improve the outlook for the rupee, which has weakened 6.9 percent since hitting a six-month high of 51.32 in early October.

"It has been a very ranged market. The winter session of parliament will impact stocks, and thereby the INR as well, but hovering around 55 is not very good for INR," said Paresh Nayar, head of fixed income and forex trading at First Rand Bank.

"Any move above 55.25 may trigger further fall towards 56.00, so I will be more comfortable with INR moving towards 54.30. The fact that trade deficit is at an all time high and crude demand is nearly $725,000 per day, on average, is putting pressure on INR," he added.

The partially convertible rupee closed at 55.0950/1050 versus its previous close of 55.06/07 as per the SBI closing rate.

India's trade deficit widened to a record $20.9 billion in October, a particular concern given the country suffers from a wide current account deficit.

Oil firms, the largest buyers of dollars in the domestic currency market, were spotted buying the greenback persistently this week, traders said.

In the offshore non-deliverable forwards market, the one-month contract was at 55.34 while the three-month was at 55.93.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 55.13 with a total traded volume of $4.3 billion. (Editing by Rafael Nam)

FILED UNDER:

Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage