Rupee retreats from over two-month lows as shares rise

MUMBAI Wed Nov 21, 2012 5:21pm IST

An employee sorts Indian currency notes at a cash counter inside a bank in Agartala February 18, 2010. REUTERS/Jayanta Dey/Files

An employee sorts Indian currency notes at a cash counter inside a bank in Agartala February 18, 2010.

Credit: Reuters/Jayanta Dey/Files

Related Topics

MUMBAI (Reuters) - The rupee retreated from more than two-month lows hit early on Wednesday to close little changed as custodian banks stepped in to sell the greenback following late gains in the domestic share market.

Persistent dollar demand from oil refiners, the largest buyers of dollars in the domestic currency market, hurt the rupee during the day.

The euro's losses following the lack of an agreement between international lenders on the next tranche of loans to Greece also weighed on the local unit.

"I think we will get close to 56 in the near-term, but it can be a sell there for some move down towards 54-54.50," said Rajeev Mahrotri, head of forex and debt trading at IndusInd Bank.

"But I see the USD/INR break past 56 by March 2013 as exports and the global economy will continue to disappoint. I am not bearish on the rupee, but I think 52-52.50 is a base, while the upper end will take it close to 57-58 levels."

The Sensex closed up 0.7 percent, its biggest daily percentage gain in almost three weeks as private sector banks such as ICICI Bank rose on value-buying.

The partially convertible rupee closed at 55.11/12 per dollar compared with 55.0950/1050 at Tuesday's close.

Traders said they would now focus on the winter session of parliament due to begin on Thursday, amid worries about the government's ability to contain the fiscal deficit at 5.3 percent of the gross domestic product for fiscal 2012/13.

Though the impact of any resolve shown by the government in shoring up its finances will be felt more immediately on the stock market, the rupee is likely to also benefit. The unit has shed 6.9 percent since its six-month high hit in early October.

In the offshore non-deliverable forwards market, the one-month contract was at 55.39, while the three-month was at 55.97.

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 55.15 with a total traded volume of $4.97 billion. (Editing by Prateek Chatterjee)

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

Popularity Poll

REUTERS SHOWCASE

Record Highs

Record Highs

Nifty touches record high; software stocks gain.  Full Article 

New Adviser

New Adviser

Arvind Subramanian likely to be chief econ adviser.  Full Article 

Pricing Mechanism

Pricing Mechanism

Govt sets up a four-member panel to re-examine gas pricing.  Full Article 

Royalty Rates

Royalty Rates

India to hike iron ore royalty, miners may struggle to pass on extra cost.  Full Article 

Commodities

Commodities

Gold near two-month low; set for weekly drop on interest rate fears  Full Article 

Reuters Exclusive

Reuters Exclusive

Apple iPhone 6 screen snag leaves supply chain scrambling   Full Article 

Helping Regional Mills

Helping Regional Mills

Govt raises sugar import duty to 25 pct from 15 pct.  Full Article 

Curbing Risks

Curbing Risks

RBI to lower ceiling on bank loans to a single corporate group.  Full Article 

Reuters India Mobile

Reuters India Mobile

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