Rupee edges down as oil refiners buy dollars

MUMBAI Tue Nov 20, 2012 5:12pm IST

An employee counts currency notes at a cash counter inside a bank in Kolkata June 18, 2012. REUTERS/Rupak De Chowdhuri/Files

An employee counts currency notes at a cash counter inside a bank in Kolkata June 18, 2012.

Credit: Reuters/Rupak De Chowdhuri/Files

Related Topics

MUMBAI (Reuters) - The 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

Election 2014

REUTERS SHOWCASE

TCS Results

TCS Results

TCS net profit rises 51.5 percent, sees stronger sales growth.  Full Article | Quote 

Election 2014

Election 2014

Promises and more promises: India’s parties pitch their visions.  Full Article | Full Coverage 

India Markets

India Markets

Sensex slumps 207 points, at 2-1/2 week closing low.  Full Article 

Telecom Sector

Telecom Sector

RComm to raise mobile call tariff by up to 20 percent  Full Article 

Chinese Economy

Chinese Economy

China economic growth slows to 18-month low in first quarter  Full Article 

New Direction

New Direction

CEO Nadella pushes data culture at Microsoft.  Full Article 

Bitcoin ATM

Bitcoin ATM

China gets first bitcoin ATM, skirting bank crackdown.  Full Article 

Strong Sales Volume

Strong Sales Volume

Small is beautiful for Coca-Cola as volumes soar in China  Full Article 

Breakingviews

Breakingviews

Diageo throws money at Indian empire-building  Full Article 

Reuters India Mobile

Reuters India Mobile

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