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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Drug Pricing

REUTERS SHOWCASE

 G20 Meet

G20 Meet

As G20 chases growth goal, members differ on how to get there   Full Article 

Modi Speaks

Modi Speaks

PM Modi says al Qaeda will fail in India - CNN.  Full Article 

Alibaba Listing

Alibaba Listing

Alibaba surges on massive demand in trading debut  Full Article 

Importing Rice

Importing Rice

Top rice exporter India importing over 100,000 T on temporary supply squeeze.  Full Article 

GSK Fined

GSK Fined

China hands drugmaker GSK record $489 mln fine, sentences executives.  Full Article 

HMT in Demand

HMT in Demand

Fans rush to HMT as watchmaker marks time.  Full Article 

Apple Not Cool?

Apple Not Cool?

Some consumers say Apple is losing its "cool" factor  Full Article 

Reuters India Mobile

Reuters India Mobile

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